Slide 1: 3rd Quarter 2019 Earnings Release Conference Call
3rd Quarter 2019 Earnings Release Conference Call October 30, 2019 1 | ©2019 Belden Inc. belden.com @beldeninc
Slide 2: Safe Harbor Statement
Safe Harbor Statement Our commentary and responses to your questions may contain forward-looking statements, including our outlook for the fourth quarter and full-year 2019, the Grass Valley divestment plan and our restructuring program. Forward-looking statements include projections of sales, earni
Slide 3: Q3 2019 Highlights
Q3 2019 Highlights • Announced the intent to divest Grass Valley • Announced a cost reduction program that is expected to result in $40M in annualized SG&A savings by 2021 • Revenues of $533.1M, near the midpoint of our expected range excluding Grass Valley • Adjusted EPS of $1.18, near the midpoint
Slide 4: Improved Portfolio Excluding Grass Valley
Improved Portfolio Excluding Grass Valley Prior 2019 Consensus Pro Forma* Revenues Revenues $2.5B $2.1B 51% 42% 58% 51% 49% Adjusted EBITDA Margin 51% 49% 45% Adjusted EBITDA Margin 55% <17% >18% Industrial Solutions Enterprise Solutions Actions will result in a more balanced and profitable portfoli
Slide 5: Q3 2019 Segment Overview Excluding Grass Valley
Q3 2019 Segment Overview Excluding Grass Valley Revenue $280.9M Key Markets Enterprise Organic Growth % (Y/Y) -4.4% • Smart Buildings Solutions • Final Mile Broadband EBITDA Margin 16.0% Revenue $252.2M • Discrete Manufacturing • Process Facilities Industrial Organic Growth % (Y/Y) -3.1%* • Mass Tra
Slide 6: Q3 2019 Financial Summary Excluding Grass Valley
Q3 2019 Financial Summary Excluding Grass Valley Q3 2019 Q2 2019 Q3 2018 Revenue $533.1M $548.4M $554.0M Gross profit $199.5M $206.2M $218.7M Gross profit percentage 37.4% 37.6% 39.5% EBITDA $89.3M $90.9M $102.4M EBITDA percentage 16.8% 16.6% 18.5% Net Income(1) $53.8M $58.2M $61.6M Earnings Per Sha
Slide 7: Q3 2019 Segment Results Excluding Grass Valley
Q3 2019 Segment Results Excluding Grass Valley Enterprise Industrial Consolidated Solutions Solutions Q3 2019 Revenue $280.9M $252.2M $533.1M EBITDA(1) $45.0M $44.8M $89.3M EBITDA Margin 16.0% 17.8% 16.8% Q2 2019 Revenue $280.7M $267.7M $548.4M EBITDA(1) $44.2M $47.1M $90.9M EBITDA Margin 15.7% 17.6
Slide 8: Q3 2019 Balance Sheet Highlights As Reported
Q3 2019 Balance Sheet Highlights As Reported Q3 2019 Q2 2019 Q3 2018 Cash and Cash Equivalents $297M $295M $329M Working Capital Turns 5.9x 6.0x 6.2x Days Sales Outstanding 68 64 66 Inventory Turns 5.3x 5.1x 4.9x PP&E Turns 6.5x 6.7x 7.5x Total Debt Principal Amount $1.42B $1.48B $1.53B Net Leverage
Slide 9: Q3 2019 Cash Flow Highlights As Reported
Q3 2019 Cash Flow Highlights As Reported TTM TTM Q3 2019 Q3 2018 Q3 2019 Q3 2018 Cash flows from operating $67.9M $130.2M $277.9M $252.5M activities Less: Net capital expenditures(1) $23.3M $23.9M $108.4M $91.7M Free cash flow(2) $44.6M $106.3M $169.5M $160.8M Cash used to acquire $0.4M $0.0M $50.1M
Slide 10: Outlook Excluding Grass Valley
Outlook Excluding Grass Valley Q4 2019 • Revenue of $510 - $530 million • Adjusted Earnings Per Share(1)(2) of $1.00 - $1.15 Full Year 2019 • Revenue of $2.092 - $2.112 billion • Adjusted Earnings Per Share(1)(2) of $4.32 - $4.47 Full Year 2019 Assumptions • Interest expense of $56 million • Tax rat
Slide 11: Questions?
Questions? 11 | ©2019 Belden Inc. belden.com @beldeninc
Slide 12: Appendix
Appendix 12 | ©2019 Belden Inc. belden.com @beldeninc
Slide 13: Statement of Operations
Statement of Operations Unaudited Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, 2019 2018 2019 2018 (In thousands, except per share data) Revenues $ 620,318 $ 655,774 $ 1,845,023 $ 1,929,978 Cost of sales (384,916) (394,917) (1,143,870) (1,180,931) Gros
Slide 14: Operating Segment Information
Operating Segment Information Enterprise Industrial Total Unaudited Solutions Solutions Segments (In thousands, except percentages) For the three months ended September 29, 2019 Segment Revenues $ 368,080 $ 252,238 $ 620,318 Segment EBITDA 56,814 44,614 101,428 Segment EBITDA margin 15.4% 17.7% 16.4
Slide 15: Operating Segment Reconciliation to Consolidated Results
Operating Segment Reconciliation to Consolidated Results Unaudited Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, 2019 2018 2019 2018 (In thousands) Total Segment Revenues $ 620,318 $ 659,003 $ 1,845,023 $ 1,937,867 Deferred revenue adjustments — (3,229)
Slide 16: Balance Sheet
Balance Sheet September 29, 2019 December 31, 2018 (Unaudited) (In thousands) ASSETS Current assets: Cash and cash equivalents $ 296,742 $ 420,610 Receivables, net 460,044 465,939 Inventories, net 290,995 316,418 Other current assets 74,876 55,757 Total current assets 1,122,657 1,258,724 Property, p
Slide 17: Cash Flow Statement
Cash Flow Statement Nine Months Ended September 29, September 30, 2019 2018 Unaudited (In thousands) Cash flows from operating activities: Net income (loss) $ (229,547) 117,220 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Goodwill and other asset impairmen
Slide 18: Q3 2019 GAAP to Non-GAAP Reconciliation
Q3 2019 GAAP to Non-GAAP Reconciliation Unaudited Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, 2019 2018 2019 2018 (In thousands, except percentages and per share amounts) GAAP revenues $ 620,318 $ 655,774 $ 1,845,023 $ 1,929,978 In addition to reporti
Slide 19: Q3 2019 GAAP to Non-GAAP Reconciliation (continued)
Q3 2019 GAAP to Non-GAAP Reconciliation (continued) Unaudited In addition to reporting financial results in accordance with accounting GAAP net income (loss) attributable to Belden $ (297,009) $ 85,881 $ (229,607) $ 117,368 principles generally accepted in the United States, we provide non-GAAP Oper
Slide 20: Trailing Quarters GAAP to Non-GAAP Reconciliation
Trailing 7 Quarters GAAP to Non-GAAP Reconciliation Three Months Ended Year Ended Three Months Ended April 1, July 1, September 30, December 31, December 31, March 31, June 30, September 29, 2018 2018 2018 2018 2018 2019 2019 2019 (In thousands, except percentages) GAAP revenues $ 605,565 $ 668,639
Slide 21: Trailing Quarters GAAP to Non-GAAP Reconciliation (continued)
Trailing 7 Quarters GAAP to Non-GAAP Reconciliation (continued) Adjusted EBITDA margin excluding Grass Valley 16.9% 18.2% 18.5% 18.6% 18.1% 15.1% 16.6% 16.8% GAAP net income (loss) attributable to Belden $ 2,618 $ 28,869 $ 85,881 $ 43,526 $ 160,894 $ 25,202 $ 42,200 $ (297,009 Operating income adjus
Slide 22: GAAP to Non-GAAP Reconciliation of Segment Measures
GAAP to Non-GAAP Reconciliation of Segment Measures Enterprise Industrial Total Unaudited Solutions Solutions Segments (In thousands, except percentages) For the three months ended September 29, 2019 Segment revenues $ 368,080 $ 252,238 $ 620,318 Less: Grass Valley revenues 87,221 - 87,221 Segment r
Slide 23: Free Cash Flow GAAP to Non-GAAP Reconciliation
Free Cash Flow GAAP to Non-GAAP Reconciliation 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 inform
Slide 24: Reconciliation of Non-GAAP Measures 2019 Earnings Guidance
Reconciliation of Non-GAAP Measures 2019 Earnings Guidance Unaudited Our guidance for income per diluted share attributable to Belden common stockholders is based upon information currently available regarding events and conditions that will impact our future operating results. In particular, our re