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Belden Reports Strong Results for Fourth Quarter and Full Year 2021 and Announces a Definitive Agreement to Divest Tripwire

February 09, 2022

ST. LOUIS--(BUSINESS WIRE)-- 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.”

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.

 

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

 

 

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

 

 

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.

 

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

 

 

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.

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

 

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

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

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.

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.

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

Source: Belden Inc.

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