Delaware | 001-12561 | 36-3601505 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Item 2.02 Results of Operations and Financial Condition. | ||
Item 9.01 Financial Statements and Exhibits. | ||
SIGNATURES | ||
EXHIBIT INDEX | ||
99.1 | Company news release dated November 1, 2017, titled “Belden Reports Solid Results for Third Quarter 2017” |
BELDEN INC. | ||||||
Date: November 1, 2017 | By: | /s/ Brian E. Anderson | ||||
Brian E. Anderson | ||||||
Senior Vice President-Legal, General | ||||||
Counsel and Corporate Secretary |
1 North Brentwood Boulevard | Phone: 314.854.8000 | |||
15th Floor | Fax: 314.854.8003 | |||
St. Louis, Missouri 63105 | ||||
www.Belden.com |
Three Months Ended | Nine Months Ended | |||||||||||||||
October 1, 2017 | October 2, 2016 | October 1, 2017 | October 2, 2016 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Revenues | $ | 621,745 | $ | 601,109 | $ | 1,783,759 | $ | 1,744,237 | ||||||||
Cost of sales | (381,921 | ) | (355,147 | ) | (1,079,312 | ) | (1,025,027 | ) | ||||||||
Gross profit | 239,824 | 245,962 | 704,447 | 719,210 | ||||||||||||
Selling, general and administrative expenses | (116,429 | ) | (126,662 | ) | (346,786 | ) | (372,125 | ) | ||||||||
Research and development | (35,442 | ) | (33,512 | ) | (105,108 | ) | (106,297 | ) | ||||||||
Amortization of intangibles | (27,162 | ) | (23,808 | ) | (77,944 | ) | (75,603 | ) | ||||||||
Operating income | 60,791 | 61,980 | 174,609 | 165,185 | ||||||||||||
Interest expense, net | (19,385 | ) | (23,513 | ) | (66,424 | ) | (71,958 | ) | ||||||||
Loss on debt extinguishment | (51,594 | ) | — | (52,441 | ) | — | ||||||||||
Income (loss) before taxes | (10,188 | ) | 38,467 | 55,744 | 93,227 | |||||||||||
Income tax benefit (expense) | 11,133 | (2,395 | ) | 6,673 | 1,136 | |||||||||||
Net income | 945 | 36,072 | 62,417 | 94,363 | ||||||||||||
Less: Net loss attributable to noncontrolling interest | (82 | ) | (88 | ) | (274 | ) | (286 | ) | ||||||||
Net income attributable to Belden | 1,027 | 36,160 | 62,691 | 94,649 | ||||||||||||
Less: Preferred stock dividends | 8,732 | 6,695 | 26,198 | 6,695 | ||||||||||||
Net income (loss) attributable to Belden common stockholders | $ | (7,705 | ) | $ | 29,465 | $ | 36,493 | $ | 87,954 | |||||||
Weighted average number of common shares and equivalents: | ||||||||||||||||
Basic | 42,256 | 42,126 | 42,251 | 42,073 | ||||||||||||
Diluted | 42,256 | 42,648 | 42,663 | 42,534 | ||||||||||||
Basic income (loss) per share attributable to Belden common stockholders: | $ | (0.18 | ) | $ | 0.70 | $ | 0.86 | $ | 2.09 | |||||||
Diluted income (loss) per share attributable to Belden common stockholders: | $ | (0.18 | ) | $ | 0.69 | $ | 0.86 | $ | 2.07 | |||||||
Common stock dividends declared per share | $ | 0.05 | $ | 0.05 | $ | 0.15 | $ | 0.15 |
Broadcast Solutions | Enterprise Solutions | Industrial Solutions | Network Solutions | Total Segments | ||||||||||||||||
(In thousands, except percentages) | ||||||||||||||||||||
For the three months ended October 1, 2017 | ||||||||||||||||||||
Segment Revenues | $ | 193,753 | $ | 167,089 | $ | 160,471 | $ | 100,432 | $ | 621,745 | ||||||||||
Segment EBITDA | 35,671 | 26,409 | 30,545 | 24,906 | 117,531 | |||||||||||||||
Segment EBITDA margin | 18.4 | % | 15.8 | % | 19.0 | % | 24.8 | % | 18.9 | % | ||||||||||
Depreciation expense | 4,088 | 2,740 | 3,285 | 1,570 | 11,683 | |||||||||||||||
Amortization of intangibles | 13,482 | 438 | 646 | 12,596 | 27,162 | |||||||||||||||
Severance, restructuring, and acquisition integration costs | 3,056 | 6,253 | 6,840 | 530 | 16,679 | |||||||||||||||
Purchase accounting effects related to acquisitions | 2,922 | — | — | — | 2,922 | |||||||||||||||
For the three months ended October 2, 2016 | ||||||||||||||||||||
Segment Revenues | $ | 196,173 | $ | 156,658 | $ | 149,847 | $ | 99,790 | $ | 602,468 | ||||||||||
Segment EBITDA | 36,545 | 27,294 | 23,649 | 24,448 | 111,936 | |||||||||||||||
Segment EBITDA margin | 18.6 | % | 17.4 | % | 15.8 | % | 24.5 | % | 18.6 | % | ||||||||||
Depreciation expense | 4,063 | 3,210 | 2,738 | 1,592 | 11,603 | |||||||||||||||
Amortization of intangibles | 10,955 | 431 | 604 | 11,818 | 23,808 | |||||||||||||||
Severance, restructuring, and acquisition integration costs | 174 | 5,573 | 4,746 | 2,302 | 12,795 | |||||||||||||||
Deferred gross profit adjustments | 283 | — | — | 1,076 | 1,359 | |||||||||||||||
For the nine months ended October 1, 2017 | ||||||||||||||||||||
Segment Revenues | $ | 550,420 | $ | 473,504 | $ | 465,907 | $ | 293,928 | $ | 1,783,759 | ||||||||||
Segment EBITDA | 90,681 | 77,310 | 87,314 | 65,563 | 320,868 | |||||||||||||||
Segment EBITDA margin | 16.5 | % | 16.3 | % | 18.7 | % | 22.3 | % | 18.0 | % | ||||||||||
Depreciation expense | 12,095 | 8,034 | 9,659 | 4,806 | 34,594 | |||||||||||||||
Amortization of intangibles | 36,950 | 1,291 | 1,928 | 37,775 | 77,944 | |||||||||||||||
Severance, restructuring, and acquisition integration costs | 4,434 | 19,267 | 8,307 | 831 | 32,839 | |||||||||||||||
Purchase accounting effects related to acquisitions | 4,089 | — | — | — | 4,089 | |||||||||||||||
For the nine months ended October 2, 2016 | ||||||||||||||||||||
Segment Revenues | $ | 560,966 | $ | 452,951 | $ | 438,746 | $ | 296,986 | $ | 1,749,649 | ||||||||||
Segment EBITDA | 89,317 | 80,605 | 73,700 | 66,715 | 310,337 | |||||||||||||||
Segment EBITDA margin | 15.9 | % | 17.8 | % | 16.8 | % | 22.5 | % | 17.7 | % | ||||||||||
Depreciation expense | 12,086 | 10,028 | 8,165 | 4,974 | 35,253 | |||||||||||||||
Amortization of intangibles | 37,306 | 1,292 | 1,796 | 35,209 | 75,603 | |||||||||||||||
Severance, restructuring, and acquisition integration costs | 5,871 | 7,280 | 7,982 | 5,939 | 27,072 | |||||||||||||||
Purchase accounting effects related to acquisitions | 195 | — | — | — | 195 | |||||||||||||||
Deferred gross profit adjustments | 1,391 | — | — | 4,021 | 5,412 |
Three Months Ended | Nine Months Ended | |||||||||||||||
October 1, 2017 | October 2, 2016 | October 1, 2017 | October 2, 2016 | |||||||||||||
(In thousands) | ||||||||||||||||
Total Segment Revenues | $ | 621,745 | $ | 602,468 | $ | 1,783,759 | $ | 1,749,649 | ||||||||
Deferred revenue adjustments | — | (1,359 | ) | — | (5,412 | ) | ||||||||||
Consolidated Revenues | $ | 621,745 | $ | 601,109 | $ | 1,783,759 | $ | 1,744,237 | ||||||||
Total Segment EBITDA | $ | 117,531 | $ | 111,936 | $ | 320,868 | $ | 310,337 | ||||||||
Income from equity method investment | 2,551 | 586 | 5,835 | 1,077 | ||||||||||||
Eliminations | (845 | ) | (977 | ) | (2,628 | ) | (2,694 | ) | ||||||||
Consolidated Adjusted EBITDA (1) | 119,237 | 111,545 | 324,075 | 308,720 | ||||||||||||
Amortization of intangibles | (27,162 | ) | (23,808 | ) | (77,944 | ) | (75,603 | ) | ||||||||
Depreciation expense | (11,683 | ) | (11,603 | ) | (34,594 | ) | (35,253 | ) | ||||||||
Severance, restructuring, and acquisition integration costs | (16,679 | ) | (12,795 | ) | (32,839 | ) | (27,072 | ) | ||||||||
Purchase accounting effects related to acquisitions | (2,922 | ) | — | (4,089 | ) | (195 | ) | |||||||||
Deferred gross profit adjustments | — | (1,359 | ) | — | (5,412 | ) | ||||||||||
Consolidated operating income | 60,791 | 61,980 | 174,609 | 165,185 | ||||||||||||
Interest expense, net | (19,385 | ) | (23,513 | ) | (66,424 | ) | (71,958 | ) | ||||||||
Loss on debt extinguishment | (51,594 | ) | — | (52,441 | ) | — | ||||||||||
Consolidated income (loss) before taxes | $ | (10,188 | ) | $ | 38,467 | $ | 55,744 | $ | 93,227 |
(1) | Consolidated Adjusted EBITDA is a non-GAAP measure. See Reconciliation of Non-GAAP Measures for additional information. |
October 1, 2017 | December 31, 2016 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 461,363 | $ | 848,116 | ||||
Receivables, net | 439,276 | 388,059 | ||||||
Inventories, net | 262,494 | 190,408 | ||||||
Other current assets | 67,048 | 29,176 | ||||||
Assets held for sale | 35,953 | 23,193 | ||||||
Total current assets | 1,266,134 | 1,478,952 | ||||||
Property, plant and equipment, less accumulated depreciation | 324,617 | 309,291 | ||||||
Goodwill | 1,475,467 | 1,385,995 | ||||||
Intangible assets, less accumulated amortization | 566,958 | 560,082 | ||||||
Deferred income taxes | 35,565 | 33,706 | ||||||
Other long-lived assets | 36,107 | 38,777 | ||||||
$ | 3,704,848 | $ | 3,806,803 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 301,173 | $ | 258,203 | ||||
Accrued liabilities | 257,729 | 310,340 | ||||||
Liabilities held for sale | 1,732 | 1,736 | ||||||
Total current liabilities | 560,634 | 570,279 | ||||||
Long-term debt | 1,530,077 | 1,620,161 | ||||||
Postretirement benefits | 112,938 | 104,050 | ||||||
Deferred income taxes | 21,528 | 14,276 | ||||||
Other long-term liabilities | 37,311 | 36,720 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock | 1 | 1 | ||||||
Common stock | 503 | 503 | ||||||
Additional paid-in capital | 1,123,623 | 1,116,090 | ||||||
Retained earnings | 813,936 | 783,812 | ||||||
Accumulated other comprehensive loss | (84,342 | ) | (39,067 | ) | ||||
Treasury stock | (412,059 | ) | (401,026 | ) | ||||
Total Belden stockholders’ equity | 1,441,662 | 1,460,313 | ||||||
Noncontrolling interest | 698 | 1,004 | ||||||
Total stockholders’ equity | 1,442,360 | 1,461,317 | ||||||
$ | 3,704,848 | $ | 3,806,803 |
Nine Months Ended | ||||||||
October 1, 2017 | October 2, 2016 | |||||||
(In thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 62,417 | $ | 94,363 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 112,538 | 110,857 | ||||||
Share-based compensation | 13,431 | 13,943 | ||||||
Loss on debt extinguishment | 52,441 | — | ||||||
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses: | ||||||||
Receivables | (32,950 | ) | (9,843 | ) | ||||
Inventories | (50,232 | ) | 5,626 | |||||
Accounts payable | 30,290 | (3,889 | ) | |||||
Accrued liabilities | (54,828 | ) | (43,594 | ) | ||||
Income taxes | (32,071 | ) | (17,375 | ) | ||||
Other assets | (9,046 | ) | 2,798 | |||||
Other liabilities | 11,625 | (5,457 | ) | |||||
Net cash provided by operating activities | 103,615 | 147,429 | ||||||
Cash flows from investing activities: | ||||||||
Cash used to acquire businesses, net of cash acquired | (166,896 | ) | (17,848 | ) | ||||
Capital expenditures | (33,430 | ) | (36,057 | ) | ||||
Other | — | (971 | ) | |||||
Proceeds from disposal of tangible assets | 15 | 282 | ||||||
Net cash used for investing activities | (200,311 | ) | (54,594 | ) | ||||
Cash flows from financing activities: | ||||||||
Payments under borrowing arrangements | (1,105,892 | ) | (51,875 | ) | ||||
Cash dividends paid | (32,535 | ) | (6,307 | ) | ||||
Debt issuance costs paid | (16,586 | ) | — | |||||
Payments under share repurchase program | (11,508 | ) | — | |||||
Withholding tax payments for share-based payment awards, net of proceeds from the exercise of stock options | (5,421 | ) | (5,302 | ) | ||||
Proceeds from issuance of preferred stock, net | — | 501,498 | ||||||
Borrowings under credit arrangements | 866,700 | — | ||||||
Net cash provided by (used for) financing activities | (305,242 | ) | 438,014 | |||||
Effect of foreign currency exchange rate changes on cash and cash equivalents | 15,185 | 705 | ||||||
Increase (decrease) in cash and cash equivalents | (386,753 | ) | 531,554 | |||||
Cash and cash equivalents, beginning of period | 848,116 | 216,751 | ||||||
Cash and cash equivalents, end of period | $ | 461,363 | $ | 748,305 |
Three Months Ended | Nine Months Ended | |||||||||||||||
October 1, 2017 | October 2, 2016 | October 1, 2017 | October 2, 2016 | |||||||||||||
(In thousands, except percentages and per share amounts) | ||||||||||||||||
GAAP revenues | $ | 621,745 | $ | 601,109 | $ | 1,783,759 | $ | 1,744,237 | ||||||||
Deferred revenue adjustments | — | 1,359 | — | 5,412 | ||||||||||||
Adjusted revenues | $ | 621,745 | $ | 602,468 | $ | 1,783,759 | $ | 1,749,649 | ||||||||
GAAP gross profit | $ | 239,824 | $ | 245,962 | $ | 704,447 | $ | 719,210 | ||||||||
Severance, restructuring, and acquisition integration costs | 12,406 | 2,897 | 26,523 | 6,815 | ||||||||||||
Purchase accounting effects related to acquisitions | 2,922 | — | 4,089 | 195 | ||||||||||||
Accelerated depreciation | 266 | 206 | 798 | 618 | ||||||||||||
Deferred gross profit adjustments | — | 1,359 | — | 5,412 | ||||||||||||
Adjusted gross profit | $ | 255,418 | $ | 250,424 | $ | 735,857 | $ | 732,250 | ||||||||
GAAP gross profit margin | 38.6 | % | 40.9 | % | 39.5 | % | 41.2 | % | ||||||||
Adjusted gross profit margin | 41.1 | % | 41.6 | % | 41.3 | % | 41.9 | % | ||||||||
GAAP selling, general and administrative expenses | $ | (116,429 | ) | $ | (126,662 | ) | $ | (346,786 | ) | $ | (372,125 | ) | ||||
Severance, restructuring, and acquisition integration costs | 4,174 | 9,924 | 6,264 | 19,604 | ||||||||||||
Accelerated depreciation | — | 16 | — | 16 | ||||||||||||
Adjusted selling, general and administrative expenses | $ | (112,255 | ) | $ | (116,722 | ) | $ | (340,522 | ) | $ | (352,505 | ) | ||||
GAAP research and development | $ | (35,442 | ) | $ | (33,512 | ) | $ | (105,108 | ) | $ | (106,297 | ) | ||||
Severance, restructuring, and acquisition integration costs | 99 | (26 | ) | 52 | 653 | |||||||||||
Adjusted research and development | $ | (35,343 | ) | $ | (33,538 | ) | $ | (105,056 | ) | $ | (105,644 | ) | ||||
GAAP net income attributable to Belden | $ | 1,027 | $ | 36,160 | $ | 62,691 | $ | 94,649 | ||||||||
Interest expense, net | 19,385 | 23,513 | 66,424 | 71,958 | ||||||||||||
Income tax expense (benefit) | (11,133 | ) | 2,395 | (6,673 | ) | (1,136 | ) | |||||||||
Loss on debt extinguishment | 51,594 | — | 52,441 | — | ||||||||||||
Noncontrolling interest | (82 | ) | (88 | ) | (274 | ) | (286 | ) | ||||||||
Total non-operating adjustments | 59,764 | 25,820 | 111,918 | 70,536 | ||||||||||||
Amortization of intangible assets | 27,162 | 23,808 | 77,944 | 75,603 | ||||||||||||
Severance, restructuring, and integration costs | 16,679 | 12,795 | 32,839 | 27,072 | ||||||||||||
Purchase accounting effects related to acquisitions | 2,922 | — | 4,089 | 195 | ||||||||||||
Accelerated depreciation | 266 | 222 | 798 | 634 | ||||||||||||
Deferred gross profit adjustments | — | 1,359 | — | 5,412 | ||||||||||||
Total operating income adjustments | 47,029 | 38,184 | 115,670 | 108,916 | ||||||||||||
Depreciation expense | 11,417 | 11,381 | 33,796 | 34,619 | ||||||||||||
Adjusted EBITDA | $ | 119,237 | $ | 111,545 | $ | 324,075 | $ | 308,720 | ||||||||
GAAP net income margin | 0.2 | % | 6.0 | % | 3.5 | % | 5.4 | % | ||||||||
Adjusted EBITDA margin | 19.2 | % | 18.5 | % | 18.2 | % | 17.6 | % | ||||||||
GAAP net income attributable to Belden | $ | 1,027 | $ | 36,160 | $ | 62,691 | $ | 94,649 | ||||||||
Operating income adjustments from above | 47,029 | 38,184 | 115,670 | 108,916 | ||||||||||||
Loss on debt extinguishment | 51,594 | — | 52,441 | — | ||||||||||||
Amortization expense attributable to noncontrolling interest, net of tax | (16 | ) | (16 | ) | (47 | ) | (48 | ) | ||||||||
Tax effect of adjustments | (25,782 | ) | (12,820 | ) | (44,750 | ) | (33,850 | ) | ||||||||
Adjusted net income attributable to Belden | $ | 73,852 | $ | 61,508 | $ | 186,005 | $ | 169,667 | ||||||||
GAAP net income attributable to Belden | $ | 1,027 | $ | 36,160 | $ | 62,691 | $ | 94,649 | ||||||||
Less: Preferred stock dividends | 8,732 | 6,695 | 26,198 | 6,695 | ||||||||||||
GAAP net income (loss) attributable to Belden common stockholders | $ | (7,705 | ) | $ | 29,465 | $ | 36,493 | $ | 87,954 | |||||||
Adjusted net income attributable to Belden | $ | 73,852 | $ | 61,508 | $ | 186,005 | $ | 169,667 | ||||||||
Less: Preferred stock dividends | — | 6,695 | 26,198 | 6,695 | ||||||||||||
Adjusted net income attributable to Belden common stockholders | $ | 73,852 | $ | 54,813 | $ | 159,807 | $ | 162,972 | ||||||||
GAAP income (loss) per diluted share attributable to Belden common stockholders | $ | (0.18 | ) | $ | 0.69 | $ | 0.86 | $ | 2.07 | |||||||
Adjusted income per diluted share attributable to Belden common stockholders | $ | 1.49 | $ | 1.29 | $ | 3.75 | $ | 3.83 | ||||||||
GAAP diluted weighted average shares | 42,256 | 42,648 | 42,663 | 42,534 | ||||||||||||
Adjustment for assumed conversion of preferred stock | ||||||||||||||||
into common stock | 6,848 | — | — | — | ||||||||||||
Adjustment for anti-dilutive shares that are dilutive under | ||||||||||||||||
adjusted measures | 414 | — | — | — | ||||||||||||
Adjusted diluted weighted average shares | 49,518 | 42,648 | 42,663 | 42,534 |
Three Months Ended | Nine Months Ended | |||||||||||||||
October 1, 2017 | October 2, 2016 | October 1, 2017 | October 2, 2016 | |||||||||||||
(In thousands) | ||||||||||||||||
GAAP net cash provided by operating activities | $ | 68,834 | $ | 86,859 | $ | 103,615 | $ | 147,429 | ||||||||
Capital expenditures, net of proceeds from the disposal of tangible assets | (11,218 | ) | (10,692 | ) | (33,415 | ) | (35,775 | ) | ||||||||
Non-GAAP free cash flow | $ | 57,616 | $ | 76,167 | $ | 70,200 | $ | 111,654 |
Year Ended December 31, 2017 | Three Months Ended December 31, 2017 | |||
Adjusted income per diluted share attributable to Belden common stockholders | $5.45 - $5.55 | $1.71 - $1.81 | ||
Amortization of intangible assets | $(1.51) | $(0.07) | ||
Loss on debt extinguishment | $(0.76) | $0.00 | ||
Severance, restructuring, and acquisition integration costs | $(0.59) | $(0.02) | ||
Purchase accounting effects related to acquisitions | $(0.09) | $(0.01) | ||
GAAP income per diluted share attributable to Belden common stockholders | $2.50 - $2.60 | $1.61 - $1.71 |