Delaware | 001-12561 | 36-3601505 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
d) Exhibits. | ||
Exhibit Number | Description | |
99.1 |
BELDEN INC. | ||||||
Date: August 1, 2018 | 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 | Six Months Ended | |||||||||||||||
July 1, 2018 | July 2, 2017 | July 1, 2018 | July 2, 2017 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Revenues | $ | 668,639 | $ | 610,633 | $ | 1,274,204 | $ | 1,162,014 | ||||||||
Cost of sales | (411,043 | ) | (367,529 | ) | (786,014 | ) | (696,536 | ) | ||||||||
Gross profit | 257,596 | 243,104 | 488,190 | 465,478 | ||||||||||||
Selling, general and administrative expenses | (138,842 | ) | (118,071 | ) | (263,714 | ) | (230,657 | ) | ||||||||
Research and development | (37,209 | ) | (35,144 | ) | (74,310 | ) | (69,666 | ) | ||||||||
Amortization of intangibles | (25,039 | ) | (27,113 | ) | (49,457 | ) | (50,782 | ) | ||||||||
Operating income | 56,506 | 62,776 | 100,709 | 114,373 | ||||||||||||
Interest expense, net | (15,088 | ) | (23,533 | ) | (32,066 | ) | (47,039 | ) | ||||||||
Non-operating pension costs | (257 | ) | (295 | ) | (532 | ) | (555 | ) | ||||||||
Loss on debt extinguishment | (3,030 | ) | (847 | ) | (22,990 | ) | (847 | ) | ||||||||
Income before taxes | 38,131 | 38,101 | 45,121 | 65,932 | ||||||||||||
Income tax expense | (9,339 | ) | (2,210 | ) | (13,759 | ) | (4,460 | ) | ||||||||
Net income | 28,792 | 35,891 | 31,362 | 61,472 | ||||||||||||
Less: Net loss attributable to noncontrolling interest | (77 | ) | (86 | ) | (125 | ) | (192 | ) | ||||||||
Net income attributable to Belden | 28,869 | 35,977 | 31,487 | 61,664 | ||||||||||||
Less: Preferred stock dividends | 8,733 | 8,733 | 17,466 | 17,466 | ||||||||||||
Net income attributable to Belden common stockholders | $ | 20,136 | $ | 27,244 | $ | 14,021 | $ | 44,198 | ||||||||
Weighted average number of common shares and equivalents: | ||||||||||||||||
Basic | 40,735 | 42,283 | 41,184 | 42,249 | ||||||||||||
Diluted | 40,974 | 42,832 | 41,492 | 42,753 | ||||||||||||
Basic income per share attributable to Belden common stockholders: | $ | 0.49 | $ | 0.64 | $ | 0.34 | $ | 1.05 | ||||||||
Diluted income per share attributable to Belden common stockholders: | $ | 0.49 | $ | 0.64 | $ | 0.34 | $ | 1.03 | ||||||||
Common stock dividends declared per share | $ | 0.05 | $ | 0.05 | $ | 0.10 | $ | 0.10 |
Enterprise Solutions | Industrial Solutions | Total Segments | ||||||||||
(In thousands, except percentages) | ||||||||||||
For the three months ended July 1, 2018 | ||||||||||||
Segment Revenues | $ | 399,695 | $ | 271,746 | $ | 671,441 | ||||||
Segment EBITDA | 70,281 | 53,225 | 123,506 | |||||||||
Segment EBITDA margin | 17.6 | % | 19.6 | % | 18.4 | % | ||||||
Depreciation expense | 7,153 | 4,873 | 12,026 | |||||||||
Amortization of intangibles | 11,809 | 13,230 | 25,039 | |||||||||
Amortization of software development intangible assets | 488 | — | 488 | |||||||||
Severance, restructuring, and acquisition integration costs | 22,887 | 2,041 | 24,928 | |||||||||
Purchase accounting effects of acquisitions | 1,036 | — | 1,036 | |||||||||
Deferred revenue adjustments | 2,802 | — | 2,802 | |||||||||
For the three months ended July 2, 2017 | ||||||||||||
Segment Revenues | $ | 348,804 | $ | 261,829 | $ | 610,633 | ||||||
Segment EBITDA | 56,441 | 54,081 | 110,522 | |||||||||
Segment EBITDA margin | 16.2 | % | 20.7 | % | 18.1 | % | ||||||
Depreciation expense | 6,753 | 4,775 | 11,528 | |||||||||
Amortization of intangibles | 13,882 | 13,231 | 27,113 | |||||||||
Severance, restructuring, and acquisition integration costs | 9,111 | 449 | 9,560 | |||||||||
Purchase accounting effects of acquisitions | 1,167 | — | 1,167 | |||||||||
For the six months ended July 1, 2018 | ||||||||||||
Segment Revenues | $ | 750,685 | $ | 528,179 | $ | 1,278,864 | ||||||
Segment EBITDA | 127,733 | 99,651 | 227,384 | |||||||||
Segment EBITDA margin | 17.0 | % | 18.9 | % | 17.8 | % | ||||||
Depreciation expense | 14,373 | 9,518 | 23,891 | |||||||||
Amortization of intangibles | 22,979 | 26,478 | 49,457 | |||||||||
Amortization of software development intangible assets | 724 | — | 724 | |||||||||
Severance, restructuring, and acquisition integration costs | 37,421 | 7,901 | 45,322 | |||||||||
Purchase accounting effects of acquisitions | 1,538 | — | 1,538 | |||||||||
Deferred revenue adjustments | 4,660 | — | 4,660 | |||||||||
For the six months ended July 2, 2017 | ||||||||||||
Segment Revenues | $ | 663,082 | $ | 498,932 | $ | 1,162,014 | ||||||
Segment EBITDA | 105,964 | 97,928 | 203,892 | |||||||||
Segment EBITDA margin | 16.0 | % | 19.6 | % | 17.5 | % | ||||||
Depreciation expense | 13,301 | 9,610 | 22,911 | |||||||||
Amortization of intangibles | 24,321 | 26,461 | 50,782 | |||||||||
Severance, restructuring, and acquisition integration costs | 14,392 | 1,768 | 16,160 | |||||||||
Purchase accounting effects of acquisitions | 1,167 | — | 1,167 |
Three Months Ended | Six Months Ended | |||||||||||||||
July 1, 2018 | July 2, 2017 | July 1, 2018 | July 2, 2017 | |||||||||||||
(In thousands) | ||||||||||||||||
Total Segment Revenues | $ | 671,441 | $ | 610,633 | $ | 1,278,864 | $ | 1,162,014 | ||||||||
Deferred revenue adjustments | (2,802 | ) | — | (4,660 | ) | — | ||||||||||
Consolidated Revenues | $ | 668,639 | $ | 610,633 | $ | 1,274,204 | $ | 1,162,014 | ||||||||
Total Segment EBITDA | $ | 123,506 | $ | 110,522 | $ | 227,384 | $ | 203,892 | ||||||||
Income from equity method investment | — | 2,277 | — | 3,284 | ||||||||||||
Non-operating pension costs | (257 | ) | (295 | ) | (532 | ) | (555 | ) | ||||||||
Eliminations | (681 | ) | (655 | ) | (989 | ) | (1,783 | ) | ||||||||
Consolidated Adjusted EBITDA (1) | 122,568 | 111,849 | 225,863 | 204,838 | ||||||||||||
Amortization of intangibles | (25,039 | ) | (27,113 | ) | (49,457 | ) | (50,782 | ) | ||||||||
Severance, restructuring, and acquisition integration costs | (24,928 | ) | (9,560 | ) | (45,322 | ) | (16,160 | ) | ||||||||
Interest expense, net | (15,088 | ) | (23,533 | ) | (32,066 | ) | (47,039 | ) | ||||||||
Depreciation expense | (12,026 | ) | (11,528 | ) | (23,891 | ) | (22,911 | ) | ||||||||
Loss on debt extinguishment | (3,030 | ) | (847 | ) | (22,990 | ) | (847 | ) | ||||||||
Deferred revenue adjustments | (2,802 | ) | — | (4,660 | ) | — | ||||||||||
Purchase accounting effects related to acquisitions | (1,036 | ) | (1,167 | ) | (1,538 | ) | (1,167 | ) | ||||||||
Amortization of software development intangible assets | (488 | ) | — | (724 | ) | — | ||||||||||
Loss on sale of assets | — | — | (94 | ) | — | |||||||||||
Consolidated income before taxes | $ | 38,131 | $ | 38,101 | $ | 45,121 | $ | 65,932 |
(1) | Consolidated Adjusted EBITDA is a non-GAAP measure. See Reconciliation of Non-GAAP Measures for additional information. |
July 1, 2018 | December 31, 2017 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 261,449 | $ | 561,108 | ||||
Receivables, net | 463,225 | 473,570 | ||||||
Inventories, net | 319,133 | 297,226 | ||||||
Other current assets | 48,779 | 40,167 | ||||||
Total current assets | 1,092,586 | 1,372,071 | ||||||
Property, plant and equipment, less accumulated depreciation | 345,593 | 337,322 | ||||||
Goodwill | 1,553,269 | 1,478,257 | ||||||
Intangible assets, less accumulated amortization | 547,981 | 545,207 | ||||||
Deferred income taxes | 65,439 | 42,549 | ||||||
Other long-lived assets | 34,551 | 65,207 | ||||||
$ | 3,639,419 | $ | 3,840,613 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 302,651 | $ | 376,277 | ||||
Accrued liabilities | 309,264 | 302,651 | ||||||
Total current liabilities | 611,915 | 678,928 | ||||||
Long-term debt | 1,482,928 | 1,560,748 | ||||||
Postretirement benefits | 126,023 | 102,085 | ||||||
Deferred income taxes | 32,669 | 27,713 | ||||||
Other long-term liabilities | 34,774 | 36,273 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock | 1 | 1 | ||||||
Common stock | 503 | 503 | ||||||
Additional paid-in capital | 1,129,490 | 1,123,832 | ||||||
Retained earnings | 814,071 | 833,610 | ||||||
Accumulated other comprehensive loss | (68,406 | ) | (98,026 | ) | ||||
Treasury stock | (525,054 | ) | (425,685 | ) | ||||
Total Belden stockholders’ equity | 1,350,605 | 1,434,235 | ||||||
Noncontrolling interest | 505 | 631 | ||||||
Total stockholders’ equity | 1,351,110 | 1,434,866 | ||||||
$ | 3,639,419 | $ | 3,840,613 |
Six Months Ended | ||||||||
July 1, 2018 | July 2, 2017 | |||||||
(In thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 31,362 | $ | 61,472 | ||||
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||||||||
Depreciation and amortization | 74,072 | 73,693 | ||||||
Share-based compensation | 7,868 | 8,924 | ||||||
Loss on debt extinguishment | 22,990 | 847 | ||||||
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses: | ||||||||
Receivables | (12,370 | ) | (17,982 | ) | ||||
Inventories | (14,486 | ) | (42,052 | ) | ||||
Accounts payable | (84,689 | ) | 14,748 | |||||
Accrued liabilities | (30,351 | ) | (55,094 | ) | ||||
Accrued taxes | (4,142 | ) | (12,523 | ) | ||||
Other assets | (17,275 | ) | (6,573 | ) | ||||
Other liabilities | (2,341 | ) | 9,321 | |||||
Net cash provided by (used for) operating activities | (29,362 | ) | 34,781 | |||||
Cash flows from investing activities: | ||||||||
Cash used to acquire businesses, net of cash acquired | (84,580 | ) | (166,945 | ) | ||||
Capital expenditures | (39,493 | ) | (22,197 | ) | ||||
Proceeds from disposal of tangible assets | 1,517 | — | ||||||
Proceeds from disposal of business | 40,171 | — | ||||||
Net cash used for investing activities | (82,385 | ) | (189,142 | ) | ||||
Cash flows from financing activities: | ||||||||
Payments under borrowing arrangements | (484,757 | ) | (5,221 | ) | ||||
Payments under share repurchase program | (100,000 | ) | — | |||||
Cash dividends paid | (22,034 | ) | (21,688 | ) | ||||
Debt issuance costs paid | (7,469 | ) | (2,044 | ) | ||||
Withholding tax payments for share-based payment awards | (1,579 | ) | (4,726 | ) | ||||
Redemption of stockholders' rights agreement | (411 | ) | — | |||||
Borrowings under credit arrangements | 431,270 | — | ||||||
Net cash used for financing activities | (184,980 | ) | (33,679 | ) | ||||
Effect of foreign currency exchange rate changes on cash and cash equivalents | (2,932 | ) | 10,284 | |||||
Decrease in cash and cash equivalents | (299,659 | ) | (177,756 | ) | ||||
Cash and cash equivalents, beginning of period | 561,108 | 848,116 | ||||||
Cash and cash equivalents, end of period | $ | 261,449 | $ | 670,360 |
Three Months Ended | Six Months Ended | |||||||||||||||
July 1, 2018 | July 2, 2017 | July 1, 2018 | July 2, 2017 | |||||||||||||
(In thousands, except percentages and per share amounts) | ||||||||||||||||
GAAP revenues | $ | 668,639 | $ | 610,633 | $ | 1,274,204 | $ | 1,162,014 | ||||||||
Deferred revenue adjustments | 2,802 | — | 4,660 | — | ||||||||||||
Adjusted revenues | $ | 671,441 | $ | 610,633 | $ | 1,278,864 | $ | 1,162,014 | ||||||||
GAAP gross profit | $ | 257,596 | $ | 243,104 | $ | 488,190 | $ | 465,478 | ||||||||
Severance, restructuring, and acquisition integration costs | 7,231 | 8,189 | 16,662 | 14,117 | ||||||||||||
Deferred revenue adjustments | 2,802 | — | 4,660 | — | ||||||||||||
Purchase accounting effects related to acquisitions | 773 | 1,167 | 1,275 | 1,167 | ||||||||||||
Amortization of software development intangible assets | 488 | — | 724 | — | ||||||||||||
Accelerated depreciation | — | 266 | — | 532 | ||||||||||||
Adjusted gross profit | $ | 268,890 | $ | 252,726 | $ | 511,511 | $ | 481,294 | ||||||||
GAAP gross profit margin | 38.5 | % | 39.8 | % | 38.3 | % | 40.1 | % | ||||||||
Adjusted gross profit margin | 40.0 | % | 41.4 | % | 40.0 | % | 41.4 | % | ||||||||
GAAP selling, general and administrative expenses | $ | (138,842 | ) | $ | (118,071 | ) | $ | (263,714 | ) | $ | (230,657 | ) | ||||
Severance, restructuring, and acquisition integration costs | 14,544 | 1,362 | 23,946 | 2,090 | ||||||||||||
Purchase accounting effects related to acquisitions | 263 | — | 263 | — | ||||||||||||
Loss on sale of assets | — | — | 94 | — | ||||||||||||
Adjusted selling, general and administrative expenses | $ | (124,035 | ) | $ | (116,709 | ) | $ | (239,411 | ) | $ | (228,567 | ) | ||||
GAAP research and development | $ | (37,209 | ) | $ | (35,144 | ) | $ | (74,310 | ) | $ | (69,666 | ) | ||||
Severance, restructuring, and acquisition integration costs | 3,153 | 9 | 4,714 | (47 | ) | |||||||||||
Adjusted research and development | $ | (34,056 | ) | $ | (35,135 | ) | $ | (69,596 | ) | $ | (69,713 | ) | ||||
GAAP net income attributable to Belden | $ | 28,869 | $ | 35,977 | $ | 31,487 | $ | 61,664 | ||||||||
Interest expense, net | 15,088 | 23,533 | 32,066 | 47,039 | ||||||||||||
Loss on debt extinguishment | 3,030 | 847 | 22,990 | 847 | ||||||||||||
Income tax expense | 9,339 | 2,210 | 13,759 | 4,460 | ||||||||||||
Noncontrolling interest | (77 | ) | (86 | ) | (125 | ) | (192 | ) | ||||||||
Total non-operating adjustments | 27,380 | 26,504 | 68,690 | 52,154 | ||||||||||||
Amortization of intangible assets | 25,039 | 27,113 | 49,457 | 50,782 | ||||||||||||
Severance, restructuring, and acquisition integration costs | 24,928 | 9,560 | 45,322 | 16,160 | ||||||||||||
Deferred revenue adjustments | 2,802 | — | 4,660 | — | ||||||||||||
Purchase accounting effects related to acquisitions | 1,036 | 1,167 | 1,538 | 1,167 | ||||||||||||
Amortization of software development intangible assets | 488 | — | 724 | — | ||||||||||||
Loss on sale of assets | — | — | 94 | — | ||||||||||||
Accelerated depreciation | — | 266 | — | 532 | ||||||||||||
Total operating income adjustments | 54,293 | 38,106 | 101,795 | 68,641 | ||||||||||||
Depreciation expense | 12,026 | 11,262 | 23,891 | 22,379 | ||||||||||||
Adjusted EBITDA | $ | 122,568 | $ | 111,849 | $ | 225,863 | $ | 204,838 | ||||||||
GAAP net income margin | 4.3 | % | 5.9 | % | 2.5 | % | 5.3 | % | ||||||||
Adjusted EBITDA margin | 18.3 | % | 18.3 | % | 17.7 | % | 17.6 | % | ||||||||
GAAP net income attributable to Belden | $ | 28,869 | $ | 35,977 | $ | 31,487 | $ | 61,664 | ||||||||
Operating income adjustments from above | 54,293 | 38,106 | 101,795 | 68,641 | ||||||||||||
Loss on debt extinguishment | 3,030 | 847 | 22,990 | 847 | ||||||||||||
Tax effect of adjustments above | (13,577 | ) | (10,592 | ) | (25,689 | ) | (18,968 | ) | ||||||||
Impact of Tax Cuts and Jobs Act enactment | — | — | (473 | ) | — | |||||||||||
Amortization expense attributable to noncontrolling interest, net of tax | (16 | ) | (16 | ) | (33 | ) | (31 | ) | ||||||||
Adjusted net income attributable to Belden | $ | 72,599 | $ | 64,322 | $ | 130,077 | $ | 112,153 | ||||||||
GAAP net income attributable to Belden | $ | 28,869 | $ | 35,977 | $ | 31,487 | $ | 61,664 | ||||||||
Less: Preferred stock dividends | 8,733 | 8,733 | 17,466 | 17,466 | ||||||||||||
GAAP net income attributable to Belden common stockholders | $ | 20,136 | $ | 27,244 | $ | 14,021 | $ | 44,198 | ||||||||
Adjusted net income attributable to Belden | $ | 72,599 | $ | 64,322 | $ | 130,077 | $ | 112,153 | ||||||||
Less: Preferred stock dividends | — | — | — | 17,466 | ||||||||||||
Adjusted net income attributable to Belden common stockholders | $ | 72,599 | $ | 64,322 | $ | 130,077 | $ | 94,687 | ||||||||
GAAP income per diluted share attributable to Belden common stockholders | $ | 0.49 | $ | 0.64 | $ | 0.34 | $ | 1.03 | ||||||||
Adjusted income per diluted share attributable to Belden common stockholders | $ | 1.52 | $ | 1.29 | $ | 2.69 | $ | 2.21 | ||||||||
GAAP diluted weighted average shares | 40,974 | 42,832 | 41,492 | 42,753 | ||||||||||||
Adjustment for anti-dilutive shares that are dilutive under adjusted measures | 6,857 | 6,857 | 6,857 | — | ||||||||||||
Adjusted diluted weighted average shares | 47,831 | 49,689 | 48,349 | 42,753 |
Three Months Ended | Six Months Ended | |||||||||||||||
July 1, 2018 | July 2, 2017 | July 1, 2018 | July 2, 2017 | |||||||||||||
(In thousands) | ||||||||||||||||
GAAP net cash provided by (used for) operating activities | $ | 54,498 | $ | 47,044 | $ | (29,362 | ) | $ | 34,781 | |||||||
Capital expenditures, net of proceeds from the disposal of tangible assets | (22,101 | ) | (11,798 | ) | (37,976 | ) | (22,197 | ) | ||||||||
Non-GAAP free cash flow | $ | 32,397 | $ | 35,246 | $ | (67,338 | ) | $ | 12,584 |
Year Ended December 31, 2018 | Three Months Ended September 30, 2018 | |||
Adjusted revenues | $2.643 - $2.673 billion | $670 - $690 million | ||
Deferred revenue adjustments | ($10 million) | ($3 million) | ||
GAAP revenues | $2.633 - $2.663 billion | $667 - $687 million | ||
Adjusted income per diluted share attributable to Belden common stockholders | $6.28 - $6.48 | $1.65 - $1.75 | ||
Amortization of intangible assets | $(1.76) | $(0.42) | ||
Severance, restructuring, and acquisition integration costs | $(1.30) | $(0.37) | ||
Gain from patent litigation, net of costs | $0.93 | $0.93 | ||
Loss on debt extinguishment | $(0.41) | $— | ||
Deferred revenue adjustments | $(0.18) | $(0.05) | ||
Purchase accounting effects of acquisitions | $(0.04) | $(0.01) | ||
GAAP income per diluted share attributable to Belden common stockholders | $3.52 - $3.72 | $1.73 - $1.83 |