Belden Reports Results for Second Quarter 2020

Jul 29, 2020

ST. LOUIS--(BUSINESS WIRE)-- Belden Inc. (NYSE: BDC), a leading global supplier of specialty networking solutions, today reported fiscal second quarter 2020 results for the period ended June 28, 2020.

Second Quarter 2020

Revenues for the quarter totaled $424.8 million, compared to $548.4 million in the prior-year period. EPS totaled $0.07 compared to $0.82 in the second quarter 2019.

Adjusted EPS was $0.46 compared to $1.26 in the second quarter 2019. 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, “Overall, in light of COVID-19 the business performed in line with our expectations during the second quarter. We are pleased to report double-digit organic order growth in our broadband & 5G business, along with positive operating and free cash flows. We are very comfortable with our liquidity position, and as a result during the second quarter we repaid $100 million of the $190 million that we previously drew down under our revolver.”

Outlook

“The COVID-19 situation continues to create significant economic uncertainty and challenges in our global markets, but demand trends in our business appear to have stabilized. Assuming no further material disruptions related to the global pandemic, we expect modest sequential improvement in the third and fourth quarters. The Grass Valley divestiture represented an important milestone for Belden, and we were pleased to complete the transaction. We continue to align our portfolio of businesses around the favorable secular trends in industrial automation, cybersecurity, broadband & 5G, and smart buildings, and the Company is well positioned for profitable growth longer-term,” said Mr. Vestjens.

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.

Earnings per Share (EPS)

All references to EPS within this earnings release refer to income from continuing operations per diluted share attributable to Belden common stockholders.

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

 

Six Months Ended

 

 

June 28, 2020

 

June 30, 2019

 

June 28, 2020

 

June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except per share data)

Revenues

 

$

424,811

 

 

$

548,352

 

 

$

888,337

 

 

$

1,048,492

 

Cost of sales

 

(274,871

)

 

(343,280

)

 

(567,896

)

 

(656,564

)

Gross profit

 

149,940

 

 

205,072

 

 

320,441

 

 

391,928

 

Selling, general and administrative expenses

 

(91,703

)

 

(102,454

)

 

(190,092

)

 

(200,409

)

Research and development expenses

 

(25,090

)

 

(24,775

)

 

(51,309

)

 

(48,022

)

Amortization of intangibles

 

(16,017

)

 

(19,068

)

 

(32,202

)

 

(37,232

)

Operating income

 

17,130

 

 

58,775

 

 

46,838

 

 

106,265

 

Interest expense, net

 

(14,257

)

 

(13,961

)

 

(27,581

)

 

(27,949

)

Non-operating pension benefit

 

700

 

 

537

 

 

1,399

 

 

1,140

 

Income from continuing operations before taxes

 

3,573

 

 

45,351

 

 

20,656

 

 

79,456

 

Income tax expense

 

(400

)

 

(3,956

)

 

(2,592

)

 

(10,126

)

Income from continuing operations

 

3,173

 

 

41,395

 

 

18,064

 

 

69,330

 

Income (loss) from discontinued operations, net of tax

 

(71,054

)

 

895

 

 

(97,164

)

 

(1,862

)

Net income (loss)

 

(67,881

)

 

42,290

 

 

(79,100

)

 

67,468

 

Less: Net income (loss) attributable to noncontrolling interest

 

24

 

 

90

 

 

(6

)

 

66

 

Net income (loss) attributable to Belden

 

(67,905

)

 

42,200

 

 

(79,094

)

 

67,402

 

Less: Preferred stock dividends

 

 

 

8,733

 

 

 

 

17,466

 

Net income (loss) attributable to Belden common stockholders

 

$

(67,905

)

 

$

33,467

 

 

$

(79,094

)

 

$

49,936

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares and equivalents:

 

 

 

 

 

 

 

 

Basic

 

44,557

 

 

39,389

 

 

44,969

 

 

39,405

 

Diluted

 

44,665

 

 

39,611

 

 

45,097

 

 

39,635

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per share attributable to Belden common stockholders:

 

 

 

 

 

 

 

 

Continuing operations attributable to Belden common stockholders

 

$

0.07

 

 

$

0.83

 

 

$

0.40

 

 

$

1.31

 

Discontinued operations attributable to Belden common stockholders

 

(1.59

)

 

0.02

 

 

(2.16

)

 

(0.05

)

Net income (loss) per share attributable to Belden common stockholders

 

$

(1.52

)

 

$

0.85

 

 

$

(1.76

)

 

$

1.27

 

 

 

 

 

 

 

 

 

 

Diluted income (loss) per share attributable to Belden common stockholders:

 

 

 

 

 

 

 

 

Continuing operations attributable to Belden common stockholders

 

$

0.07

 

 

$

0.82

 

 

$

0.40

 

 

$

1.31

 

Discontinued operations attributable to Belden common stockholders

 

(1.59

)

 

0.02

 

 

(2.16

)

 

(0.05

)

Net income (loss) per share attributable to Belden common stockholders

 

$

(1.52

)

 

$

0.84

 

 

$

(1.76

)

 

$

1.26

 

 

 

 

 

 

 

 

 

 

Common stock dividends declared per share

 

$

0.05

 

 

$

0.05

 

 

$

0.10

 

 

$

0.10

 

BELDEN INC.
OPERATING SEGMENT INFORMATION

(Unaudited)

Effective January 1, 2020, we transferred our West Penn Wire business and multi-conductor product lines from the Enterprise Solutions segment to the Industrial Solutions segment, and as such, have recast the prior period segment information.

 

 

Enterprise Solutions

 

Industrial Solutions

 

Total Segments

 

 

 

 

 

 

 

 

(In thousands, except percentages)

For the three months ended June 28, 2020

 

 

 

 

 

 

Segment Revenues

 

$

203,374

 

 

$

221,437

 

 

$

424,811

 

Segment EBITDA

 

22,231

 

 

26,449

 

 

48,680

 

Segment EBITDA margin

 

10.9

%

 

11.9

%

 

11.5

%

Depreciation expense

 

5,122

 

 

5,210

 

 

10,332

 

Amortization of intangibles

 

5,354

 

 

10,663

 

 

16,017

 

Amortization of software development intangible assets

 

56

 

 

330

 

 

386

 

Severance, restructuring, and acquisition integration costs

 

2,423

 

 

2,049

 

 

4,472

 

Purchase accounting effects of acquisitions

 

105

 

 

 

 

105

 

 

 

 

 

 

 

 

For the three months ended June 30, 2019

 

 

 

 

 

 

Segment Revenues

 

$

245,325

 

 

$

303,027

 

 

$

548,352

 

Segment EBITDA

 

35,571

 

 

55,744

 

 

91,315

 

Segment EBITDA margin

 

14.5

%

 

18.4

%

 

16.7

%

Depreciation expense

 

4,852

 

 

5,056

 

 

9,908

 

Amortization of intangibles

 

5,726

 

 

13,342

 

 

19,068

 

Amortization of software development intangible assets

 

35

 

 

28

 

 

63

 

Severance, restructuring, and acquisition integration costs

 

2,519

 

 

 

 

2,519

 

Purchase accounting effects of acquisitions

 

718

 

 

 

 

718

 

 

 

 

 

 

 

 

For the six months ended June 28, 2020

 

 

 

 

 

 

Segment Revenues

 

$

415,587

 

 

$

472,750

 

 

$

888,337

 

Segment EBITDA

 

46,943

 

 

61,976

 

 

108,919

 

Segment EBITDA margin

 

11.3

%

 

13.1

%

 

12.3

%

Depreciation expense

 

10,203

 

 

10,411

 

 

20,614

 

Amortization of intangibles

 

10,858

 

 

21,344

 

 

32,202

 

Amortization of software development intangible assets

 

111

 

 

605

 

 

716

 

Severance, restructuring, and acquisition integrations costs

 

4,973

 

 

3,118

 

 

8,091

 

Purchase accounting effects of acquisitions

 

125

 

 

 

 

125

 

 

 

 

 

 

 

 

For the six months ended June 30, 2019

 

 

 

 

 

 

Segment Revenues

 

$

452,408

 

 

$

596,084

 

 

$

1,048,492

 

Segment EBITDA

 

57,206

 

 

110,408

 

 

167,614

 

Segment EBITDA margin

 

12.6

%

 

18.5

%

 

16.0

%

Depreciation expense

 

9,657

 

 

10,354

 

 

20,011

 

Amortization of intangibles

 

10,425

 

 

26,807

 

 

37,232

 

Amortization of software development intangible assets

 

71

 

 

51

 

 

122

 

Severance, restructuring, and acquisition integrations costs

 

2,519

 

 

 

 

2,519

 

Purchase accounting effects of acquisitions

 

718

 

 

 

 

718

 

 

 

 

 

 

 

 

BELDEN INC.
OPERATING SEGMENT RECONCILIATION TO CONSOLIDATED RESULTS

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

June 28, 2020

 

June 30, 2019

 

June 28, 2020

 

June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

Total Segment Revenues

 

$

424,811

 

 

$

548,352

 

 

$

888,337

 

 

$

1,048,492

 

Deferred revenue adjustments

 

 

 

 

 

 

 

 

Consolidated Revenues

 

$

424,811

 

 

$

548,352

 

 

$

888,337

 

 

$

1,048,492

 

 

 

 

 

 

 

 

 

 

Total Segment EBITDA

 

$

48,680

 

 

$

91,315

 

 

$

108,919

 

 

$

167,614

 

Eliminations

 

(238

)

 

(264

)

 

(333

)

 

(747

)

Total non-operating pension benefit

 

700

 

 

537

 

 

1,399

 

 

1,140

 

Consolidated Adjusted EBITDA (1)

 

49,142

 

 

91,588

 

 

109,985

 

 

168,007

 

Amortization of intangibles

 

(16,017

)

 

(19,068

)

 

(32,202

)

 

(37,232

)

Interest expense, net

 

(14,257

)

 

(13,961

)

 

(27,581

)

 

(27,949

)

Depreciation expense

 

(10,332

)

 

(9,908

)

 

(20,614

)

 

(20,011

)

Severance, restructuring, and acquisition integration costs

 

(4,472

)

 

(2,519

)

 

(8,091

)

 

(2,519

)

Amortization of software development intangible assets

 

(386

)

 

(63

)

 

(716

)

 

(122

)

Purchase accounting effects related to acquisitions

 

(105

)

 

(718

)

 

(125

)

 

(718

)

Income from continuing operations before taxes

 

$

3,573

 

 

$

45,351

 

 

$

20,656

 

 

$

79,456

 

(1)

Consolidated Adjusted EBITDA is a non-GAAP measure. See Reconciliation of Non-GAAP Measures for additional information.

BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

 

June 28, 2020

 

December 31, 2019

 

 

(Unaudited)

 

 

 

 

(In thousands)

ASSETS

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

359,702

 

 

$

407,480

 

Receivables, net

 

302,303

 

 

334,634

 

Inventories, net

 

242,677

 

 

231,333

 

Other current assets

 

36,112

 

 

29,172

 

Current assets of discontinued operations

 

250,322

 

 

375,135

 

Total current assets

 

1,191,116

 

 

1,377,754

 

Property, plant and equipment, less accumulated depreciation

 

340,000

 

 

345,918

 

Operating lease right-of-use assets

 

56,613

 

 

62,251

 

Goodwill

 

1,244,895

 

 

1,243,669

 

Intangible assets, less accumulated amortization

 

308,529

 

 

339,505

 

Deferred income taxes

 

22,412

 

 

25,216

 

Other long-lived assets

 

13,465

 

 

12,446

 

 

 

$

3,177,030

 

 

$

3,406,759

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

 

 

 

 

Accounts payable

 

$

188,970

 

 

$

268,466

 

Accrued liabilities

 

240,419

 

 

283,799

 

Current liabilities of discontinued operations

 

109,673

 

 

170,279

 

Total current liabilities

 

539,062

 

 

722,544

 

Long-term debt

 

1,537,367

 

 

1,439,484

 

Postretirement benefits

 

130,427

 

 

136,227

 

Deferred income taxes

 

46,960

 

 

48,725

 

Long-term operating lease liabilities

 

49,772

 

 

55,652

 

Other long-term liabilities

 

43,560

 

 

38,308

 

Stockholders’ equity:

 

 

 

 

Common stock

 

503

 

 

503

 

Additional paid-in capital

 

815,982

 

 

811,955

 

Retained earnings

 

431,459

 

 

518,004

 

Accumulated other comprehensive loss

 

(85,541

)

 

(63,418

)

Treasury stock

 

(338,484

)

 

(307,197

)

Total Belden stockholders’ equity

 

823,919

 

 

959,847

 

Noncontrolling interests

 

5,963

 

 

5,972

 

Total stockholders’ equity

 

829,882

 

 

965,819

 

 

 

$

3,177,030

 

 

$

3,406,759

 

BELDEN INC.

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

(Unaudited)

 

 

 

Six Months Ended

 

 

June 28, 2020

 

June 30, 2019

 

 

 

 

 

 

 

(In thousands)

Cash flows from operating activities:

 

 

 

 

Net income (loss)

 

$

(79,100

)

 

$

67,468

 

Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:

 

 

 

 

Depreciation and amortization

 

53,533

 

 

72,739

 

Asset impairment of discontinued operations

 

113,007

 

 

 

Share-based compensation

 

8,798

 

 

7,594

 

Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses:

 

 

 

 

Receivables

 

52,602

 

 

20,329

 

Inventories

 

(9,769

)

 

17,351

 

Accounts payable

 

(86,382

)

 

(91,542

)

Accrued liabilities

 

(13,697

)

 

(59,410

)

Income taxes

 

(46,274

)

 

(12,361

)

Other assets

 

13,971

 

 

5,092

 

Other liabilities

 

(18,819

)

 

(5,615

)

Net cash provided by (used for) operating activities

 

(12,130

)

 

21,645

 

Cash flows from investing activities:

 

 

 

 

Capital expenditures

 

(41,734

)

 

(50,769

)

Cash from business acquisitions, net of cash acquired

 

590

 

 

(50,517

)

Proceeds from disposal of tangible assets

 

3,090

 

 

19

 

Net cash used for investing activities

 

(38,054

)

 

(101,267

)

Cash flows from financing activities:

 

 

 

 

Borrowings on revolver

 

190,000

 

 

 

Payments under borrowing arrangements

 

(100,000

)

 

 

Payments under share repurchase program

 

(35,000

)

 

(22,815

)

Payment of earnout consideration

 

(29,300

)

 

 

Cash dividends paid

 

(4,572

)

 

(21,448

)

Withholding tax payments for share-based payment awards

 

(1,058

)

 

(2,002

)

Other

 

(111

)

 

(173

)

Net cash provided by (used for) financing activities

 

19,959

 

 

(46,438

)

Effect of foreign currency exchange rate changes on cash and cash equivalents

 

(2,620

)

 

693

 

Decrease in cash and cash equivalents

 

(32,845

)

 

(125,367

)

Cash and cash equivalents, beginning of period

 

425,885

 

 

420,610

 

Cash and cash equivalents, end of period

 

$

393,040

 

 

$

295,243

 

 

For all periods presented, the Consolidated Cash Flow Statement includes the results of the Grass Valley disposal group.

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

 

Six Months Ended

 

 

June 28, 2020

 

June 30, 2019

 

June 28, 2020

 

June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except percentages and per share amounts)

GAAP and adjusted revenues

 

$

424,811

 

 

$

548,352

 

 

$

888,337

 

 

$

1,048,492

 

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

149,940

 

 

$

205,072

 

 

$

320,441

 

 

$

391,928

 

Amortization of software development intangible assets

 

386

 

 

63

 

 

716

 

 

122

 

Severance, restructuring, and acquisition integration costs

 

92

 

 

300

 

 

137

 

 

300

 

Purchase accounting effects related to acquisitions

 

105

 

 

718

 

 

125

 

 

718

 

Adjusted gross profit

 

$

150,523

 

 

$

206,153

 

 

$

321,419

 

 

$

393,068

 

 

 

 

 

 

 

 

 

 

GAAP gross profit margin

 

35.3

%

 

37.4

%

 

36.1

%

 

37.4

%

Adjusted gross profit margin

 

35.4

%

 

37.6

%

 

36.2

%

 

37.5

%

 

 

 

 

 

 

 

 

 

GAAP selling, general and administrative expenses

 

$

(91,703

)

 

$

(102,454

)

 

$

(190,092

)

 

$

(200,409

)

Severance, restructuring, and acquisition integration costs

 

4,380

 

 

2,219

 

 

7,954

 

 

2,219

 

Adjusted selling, general and administrative expenses

 

$

(87,323

)

 

$

(100,235

)

 

$

(182,138

)

 

$

(198,190

)

 

 

 

 

 

 

 

 

 

GAAP and adjusted research and development expenses

 

$

(25,090

 

$

(24,775

)

 

$

(51,309

)

 

$

(48,022

)

 

 

 

 

 

 

 

 

 

GAAP net income (loss) attributable to Belden

 

$

(67,905

)

 

$

42,200

 

$

(79,094

)

 

$

67,402

 

Loss (income) from discontinued operations, net of tax

 

71,054

 

 

(895

)

 

97,164

 

 

1,862

 

Interest expense, net

 

14,257

 

 

13,961

 

 

27,581

 

 

27,949

 

Income tax expense

 

400

 

 

3,956

 

 

2,592

 

 

10,126

 

Noncontrolling interest

 

24

 

 

90

 

 

(6

)

 

66

 

Total non-operating adjustments

 

85,735

 

 

17,112

 

 

127,331

 

 

40,003

 

Amortization of intangible assets

 

16,017

 

 

19,068

 

 

32,202

 

 

37,232

 

Severance, restructuring, and acquisition integration costs

 

4,472

 

 

2,519

 

 

8,091

 

 

2,519

 

Amortization of software development intangible assets

 

386

 

 

63

 

 

716

 

 

122

 

Purchase accounting effects related to acquisitions

 

105

 

 

718

 

 

125

 

 

718

 

Total operating income adjustments

 

20,980

 

 

22,368

 

 

41,134

 

 

40,591

 

Depreciation expense

 

10,332

 

 

9,908

 

 

20,614

 

 

20,011

 

Adjusted EBITDA

 

$

49,142

 

 

$

91,588

 

 

$

109,985

 

 

$

168,007

 

 

 

 

 

 

 

 

 

 

GAAP net income (loss) margin

 

(16.0

)%

 

7.7

%

 

(8.9

)%

 

6.4

%

Adjusted EBITDA margin

 

11.6

%

 

16.7

%

 

12.4

%

 

16.0

%

 

 

 

 

 

 

 

 

 

GAAP net income (loss) attributable to Belden

 

$

(67,905

)

 

$

42,200

 

 

$

(79,094

)

 

$

67,402

 

Operating income adjustments from above

 

20,980

 

 

22,368

 

 

41,134

 

 

40,591

 

Loss (income) from discontinued operations, net of tax

 

71,054

 

 

(895)

 

 

97,164

 

 

1,862

 

Tax effect of adjustments above

 

(3,800

)

 

(4,922

)

 

(8,395

)

 

(9,119

)

Adjusted net income attributable to Belden

 

$

20,329

 

 

$

58,751

 

 

$

50,809

 

 

$

100,736

 

 

 

 

 

 

 

 

 

 

GAAP net income (loss) attributable to Belden

 

$

(67,905

)

 

$

42,200

 

 

$

(79,094

)

 

$

67,402

 

Loss (income) from discontinued operations, net of tax

 

71,054

 

 

(895

)

 

97,164

 

 

1,862

 

Less: Preferred stock dividends

 

 

 

8,733

 

 

 

 

17,466

 

GAAP net income from continuing operations attributable to Belden common stockholders

 

$

3,149

 

 

$

32,572

 

 

$

18,070

 

 

$

51,798

 

 

 

 

 

 

 

 

 

 

Adjusted net income attributable to Belden

 

$

20,329

 

 

$

58,751

 

 

$

50,809

 

 

$

100,736

 

Less: Preferred stock dividends

 

 

 

 

 

 

 

17,466

 

Adjusted net income from continuing operations attributable to Belden common stockholders

 

$

20,329

 

 

$

58,751

 

 

$

50,809

 

 

$

83,270

 

GAAP income from continuing operations per diluted share attributable to Belden common stockholders

 

$

0.07

 

 

$

0.82

 

 

$

0.40

 

 

$

1.31

 

Adjusted income from continuing operations per diluted share attributable to Belden common stockholders

 

$

0.46

 

 

$

1.26

 

 

$

1.13

 

 

$

2.10

 

 

 

 

 

 

 

 

 

 

GAAP diluted weighted average shares

 

44,665

 

 

39,611

 

 

45,097

 

 

39,635

 

Adjusted for assumed conversion of preferred stock into common stock

 

 

 

6,857

 

 

 

 

 

Adjusted diluted weighted average shares

 

44,665

 

 

46,468

 

 

45,097

 

 

39,635

 

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

 

Six Months Ended

 

 

June 28, 2020

June 30, 2019

June 28, 2020

 

June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

GAAP net cash provided by (used for) operating activities

 

$

39,922

 

 

$

67,705

 

 

$

(12,130

)

 

$

21,645

 

Capital expenditures, net of proceeds from the disposal of tangible assets

 

(19,799

)

 

(27,165

)

 

(38,644

)

 

(50,750

)

Non-GAAP free cash flow

 

$

20,123

 

 

$

40,540

 

 

$

(50,774

)

 

$

(29,105

)

Forward-Looking Statements

This release and any statements made by us concerning the subject matter of this release may contain forward-looking statements, including our expectations for the third quarter and full-year 2020 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 results of the Company’s impairment analysis, which could reduce EPS, adjusted EPS, and various other financial metrics; 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 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; 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 impact of changes in global tariffs and trade agreements; difficulty in forecasting revenue due to the unpredictable timing of orders related to customer projects; 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 year ended December 31, 2019, filed with the SEC on February 11, 2020, as well as enhancements made to our risk factors throughout the year as disclosed in our first quarter 2020 Form 10-Q filed with the SEC on May 4, 2020. 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.

Belden Investor Relations
314-854-8054
Investor.Relations@Belden.com

Source: Belden Inc.

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