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.
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