Belden (BDC) Prelim. Q1 Results Miss Consensus

Belden Inc. (NYSE: BDC), a leading global supplier of specialty networking solutions, today announced preliminary fiscal first quarter 2020 results for the period ended March 29, 2020. In addition, as a result of the significant uncertainties arising from the rapidly-evolving COVID-19 situation, the Company is withdrawing the full-year 2020 revenue and EPS guidance that it previously provided. The prior guidance did not reflect any impact from COVID-19. The Company maintains a strong balance sheet and liquidity position.

First Quarter 2020

The Company now expects first quarter 2020 revenues to be $460 - $465 million, compared to the prior guidance of $485 - $505 million.

(*Consensus sees Q1 EPS of $0.72 on revenue of $484.4 million)

The Company now expects first quarter 2020 GAAP EPS to be $0.30 - $0.35, compared to the prior guidance of $0.23 - $0.38. This GAAP EPS range is subject to significant adjustments as we complete an interim asset impairment analysis, which is required primarily due to equity market conditions at the end of the first quarter 2020. First quarter 2020 adjusted EPS is expected to be $0.64 - $0.69, compared to the prior guidance of $0.70 - $0.85. Adjusted results are non-GAAP measures, and a non-GAAP reconciliation table is provided as an appendix to this release.

John Stroup, President, CEO, and Chairman of Belden Inc., said, “The health and safety of our associates and their families remain our top priority, and we are following CDC and WHO guidelines to maintain safe working conditions. We are very proud that our teams are finding ways to support local efforts to combat COVID-19. This includes donating surgical masks for medical centers and temporary hospitals, and cabling and connectivity products for ventilator production. In addition, we are using our 3D printers to produce components for face shields for medical workers, and rapidly developing and testing designs for N95 masks.”

Mr. Stroup continued, “Our first quarter results were tracking in line with our expectations through February, but some of our facilities, along with our customers and suppliers, are now experiencing varying levels of disruption related to the global pandemic. The situation is very dynamic and changing daily, and we have limited visibility into the extent to which our global markets and manufacturing capacity will be impacted. As a result, we believe it is prudent to withdraw our prior revenue and EPS guidance until visibility returns. That said, the Company has the solid financial foundation to weather these difficult times, including a strong balance sheet, covenant-light debt with no maturities until 2025 and beyond, and ample liquidity. Out of an abundance of caution, we proactively drew down $190 million under our revolver at the beginning of Q2, resulting in over $450 million in liquidity. Further, we are taking appropriate steps to manage our expenses and working capital. As we navigate the near-term challenges, we remain focused on the eventual recovery and the long-term opportunities for our business. We believe that many of our businesses, such as Broadband & 5G and Discrete Manufacturing, will emerge stronger than ever.”

The Company will report results for the fiscal first quarter ended March 29, 2020, before trading begins on Wednesday, April 29, 2020. Management will discuss the Company’s results during a conference call at 8:30 a.m. Eastern Time.

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.

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.

GAAP income from continuing operations per diluted share attributable to Belden common stockholders for the three months ended March 29, 2020 is based upon information currently available and is subject to significant adjustments as we complete an interim asset impairment analysis, which is required primarily due to equity market conditions at the end of the first quarter 2020.

You May Also Be Interested In

• The tech crown switches hands: Apple dethrones Nvidia as $4 trillion king
• Nolan’s ’The Odyssey’ eyes $200M global debut, benefiting IMAX and theater stocks
• FDA approves new Amneal iohexol injection strengths for imaging use