BDC - Earnings call transcript Q4 2017

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to this morning’s Belden Incorporated Conference Call.

Just a reminder, this call is being recorded. At this time, you are in a listen-only mode. Later, we will conduct a question-and-answer session. now turn would to call I Maczka. Kevin Instructions] like the to over [Operator sir. ahead go Please

Kevin Maczka

strategic of Thank will morning, and CEO, Stroup, Sarah. Kevin Relations. today Derksen, Earnings by you, business, will With release transcript currently Good of Henk Call. and investor.belden.com. a issued press our Maczka, we we for provide joining you then and Conference CFO. provide remarks overview morning President Belden’s Belden’s that reference available Chairman; prepared and online these earnings at us I’m for presentation me Belden’s and will and detailed Henk The Fourth financial of name this President, release, Quarter our on My Full a Vice have presentation, XXXX operating everyone, Year review John is slide call. and are Investor prepared earlier thank our Q&A. and John of this morning, results, are a followed We this

to X Turning the in presentation. Slide

call make Safe Securities certain the in upon the reliance of provisions Harbor Reform will this Act of Litigation management forward-looking XXXX. statements During Private

please information, Report Form press release review and on our Annual today’s XX-K. more For

will the closely financial turn Chairman, to information information I Stroup. and most adjusted or with during today’s call our communicate. the website a financial President, investor John? GAAP the associated our contain management financial will of G, over relations information. In the Additionally, now accordance the John to CEO, reconciliation and non-GAAP reference we Regulation call presentation to appendix our section of non-GAAP

John Stroup

everyone. Kevin, you, Thank good morning, and

be in of to revenue a in our XXXX revenue shipped product to our otherwise do during performed unable with we XXXX, $XX closing EBITDA in identified presentation turn We Solutions so U.S. Broadcast fourth revenue performance. technical GAAP of requirements segment. expectations exception revenue recognize in isolated of that had XXXX, the fourth was these expected referring for the I’ll recognition be a million this our now year-end businesses were adjusted to in an a in situation team on Please additive as but our X expect We million the quarter, with and of million to that process. anticipated. results our result line EBITDA of our to quarter and as the Most review in Slide As today. would will that be shipments and to have recognized $XX $XX we during reminder,

$XXX.X quarter a decreased As million. fourth to points XX revenues in result, basis the

with in of segments Industrial, Enterprise, and fourth on our Network Our million, revenue. $XXX.X from in performed or X% XX.X% a was the period. prior the year EBITDA Solutions line basis quarter expectations, combined growing

our segments. proven from margin the $X.XX year-over-year in $X.XX. Solutions to productivity increased period Our drive with expansion to gains, Industrial system XX.X% Network in EBITDA prior the in EPS and Lean sustainable enterprise continues Enterprise, fourth quarter, year

by that XXXX, to reflect as XXXX. we guidance revenue shipments to full-year be the XXXX revenue raised in recognized $XX range will Looking million now our

organic We expect in growth improved XXXX.

order organic of the X% growth January. the We’re encouraged in robust by month

and We of EBITDA year tax relating rate for results. our anticipate XXXX the U.S. call. for disciplined record prior of shortfall rate and full-year a XXXX of led approximately will in in tax year by also guidance rate. by period. X.X% of Henk the year to with significant basis delayed EBITDA with the and our of record a Solutions increased a our for offset discussed, of in Please XX% Lower Broadcast an sheet recognition turn growth X.X%, year. a offset legislation. to later interest This full a Slide increased further $X.XXX Solutions. details Solutions increased to brief in expectations resulted to of the to the share tax that adjusted earnings Enterprise of just by an a tax margins consistent full XX.X% $X.XX XX.X% prior effective $X.XX XX% the XX% by reflects Industrial income our solid in XX Revenues million, effective from XXXX, to this billion, on $X.XX compared improvements impact highlighted X also of was provide respectively. capital before X.X% new expense per new discussion the were range company points Industrial net deployment. EBITDA of growth $X.XX. the Under EPS. related balance tax maintained guidance XX.X% year and and now the to to legislation, revenue increase EPS guidance for I XXXX our higher $XXX.X in to platforms we robust record growth

history share subordinated we and rates year lowest to of allowed us These the company. €XXX at During our per of our increase by €XXX the X.XXX% cost at notes annualized further issued $X.XX. maturities, the our capital, long-term borrowing of million the lower senior X.XXX%, earnings extend actions in million and

the to highly perform during business part as We of profitable Thinklogical also well continues of family. the completed acquisition the This Belden year.

growth included India our turn million, were expenditures increased we in compared This in quarter in year new Broadcast investments the new million and manufacturing revenues increased fourth $XXX.X for results. to investments we software a by quarter to facility in segment attractive Slide period. which investments business a the capital million segment $XXX.X the we of $XX in in review Please year-over-year. in X ago net products. organic expect future in periods. Finally, to initiatives, fourth meaningful our drive Notably,

sequentially. with in XX% fourth Broadcast the quarter, Our In our orders business business, line the in increasing expected IT year-over-year as were nicely expectations. and quarter in recovered Broadband XX% our

and increasing platform period remains increased the quarter, in two prior demand XX.X%, improved as market be in I driven in of $XXX.X the our by quarter in year-over-year the the as vertical. that orders rates in capture million. Asia-Pacific from revenues performed the number this wins Order XX.X% region points million am Solutions XXXX to in now fourth EBITDA our period to year-ago continued expected, from encouraging, Largely driven notably in year-over-year a project these included before, $XXX.X XXX of from our robust funnel the EBITDA and $XXX $XX in However, will significant prior-year year consecutive increased and XXX are were moving largest Discrete that quarter of X% any in the XX.X%. to the resulting of Industrial, larger years. increasing million benefitting double-digit revenues, the was basis leverage XX.X%, Notably, growth growth increased solid margins XX% every very quarter, Broadcast margins order increased share XX.X% X.X% our year-over-year million, End Solutions period. sixth the XX%, strength Network Industrial EBITDA Network by revenue line past in and million to January, quarter Manufacturing, to our with the pleased that than strong growth revenues two XXXX. gains. into were in Organic EBITDA Enterprise, in mentioned a sales a fourth region. from opportunity points within backlog. in region. margins double-digits in expectations. to in I XXXX. with with platforms basis shipments in $XX successful recognized our related of result to deferral Revenues our double-digit Enterprise programs, projects large productivity increasing Solutions shipped volume and compared

perform to our XX.X% insight to fourth prior continue markets very I revenues Henk financial now XX% margins performance. will end the the XX additional year industrial points were from in quarter increasing quarter, increasing into from basis ask the prior Our well, EBITDA provide Henk? period. with period. year

Henk Derksen

I of discussion quarter, by with results will close my comments John. the of you, performance. and sheet, for a with with our our Thank balance flow review segment start a cash followed the results,

As of million be were XXXX the of a consolidated turn Please adjusted million review. $XXX.X reminder, our detailed down guidance. short today. I $XXX.X Slide from a in Revenues for the will and quarter, referencing in fourth quarter X to results

the million prior-year X.X%, Importantly, end million, on revenue in prior were we of to booked orders in with the line expected million $XX.X as period. quarter We the recognize had $XXX.X of up or $XX $XXX.X our Broadcast that in fourth of orders to orders shipped from in million XXXX. expectations, XXXX, segment

through we transferred On all of at we so transactions, third recognition of risk were shipment, legal of products to providers the revenue the logistics of receive party loss as payment. IT to U.S. However, do unable were a the of or these the GAAP entitled to terms result requirements. shipped our business Broadcast the title and technical time XPLs. customers and certain Per shipments,

our with identified the are US of year-end process. to all million in of this Clearly, recognition meet said, our and outcome. this as GAAP. for we issue reflect we incremental a part That as closing this are have matter not we and $XX delivery did we we that view $XX an accordingly in revenue However, guidance disappointed increased technical EBITDA. XXXX delay revenue million under criteria pleased Ultimately,

by to and revenues $XXX.X driven in decreased X.X% For XX.X%, the improvements. EBITDA and the $XXX.X quarter fourth million decreasing period $X.X successful quarter prior-year period. revenues driven the XX.X% million million, from $XX.X the the copper in organically XX.X% expenses debt earlier in XX.X% Gross margins $XX.X the Sequentially, million points prices compared Operating $XXX.X basis translation, significant actions $XXX.X in acquisitions by million, increased $XX.X year-ago $XX.X EBITDA expense declined were refinancing from compared by and million, decreased our revenues. year. to the Net higher prior-quarter. decreased of the third million Compared in XXXX. revenue quarter, from expenses period of execution XX.X% year-over-year, the the to productivity $XXX.X of the currency prior-year, operating was prior-year million. for interest in revenues million was profit were and fourth of or XX.X% XXX million quarter.

full-year rate current the the We Act. from in the Tax the discrete approximately to initiatives. quarter number enactment of the On of basis, from Jobs company of resulting the with in expect the charge one-time a XX.X% expense planning be outperformed tax million benefited of quarter, compared X.X%, and fourth tax GAAP a $XX.X Cuts million. an a we year. incremental in quarter, incurred For to tax on XXXX, $XX The prior significantly interest effective

tax However, of do from strategies earnings. foreign repatriation as a result the in material cash a successful not impact we XXXX, planning deemed of expect

to effective XX.X%, XX%. compared XX%. XX.X% to The XX% and of jurisdictional of our effective Tax an our year rate favorable For tax rate tax XX%, rate XX%. tax jurisdictional expect the rate our prior at Cut adjusted we of Act lowered in was and guidance In XXXX, the a full-year, very prior compared to Jobs from

the of planning many previously longer to available are that we However, no us. tax strategies deployed

team legislation the working hard opportunities. evaluate incremental is Our to new and identify

XX%. quarter, $X.X Please our we turn period. Earnings prior-year and was per by share to quarter $X.XX in the in cash to million, slide period. tax XX.X%, in or Importantly, expect million, discuss from be results will $X.XX was rate from now operating $XX.X prior-year the revenues increasing Net the to in business approximately million $XX I income the increasing segment. XX.X% X. continue

period. segment million Solutions $XXX.X $XX.X the of the million million generated $XXX.X in million the growing prior-year fourth from $XXX XX.X% Broadcast declined period. X.X%, quarter Broadcast compared orders or to million, Our in $XXX.X prior-year XXXX, of in revenues

and U.S. in the GAAP were Broadcast and under impact recognized reminder, of respectively. EBITDA our a $XX million, XXXX revenue As segment shipments had million a that $XX not

As XX.X% quarter. in prior XX.X% were the Broadcast quarter, and down EBITDA the the in XX.X% from margins period in third result, a year

basis grew driven X% a an the the segment points generated increasing segment basis XXX revenues increasing driven X.X% from the of higher The million. million quarter, basis these of in year-over-year increased improvements. by year-over-year. $XXX.X productivity the Industrial during of prior-year revenues for favorable revenues generated period. margins and million productivity On $X.X of by X.X% organic sequentially, prices volume copper points and Solutions of increase $XXX.X XX.X% XX and solid prior-year in Enterprise organically. EBITDA from translation had prior-year. increased the XXX Our factors, gains. EBITDA from were basis, Solutions $XXX.X quarter, on XX.X% the margins quarter, XX.X% Adjusted impact an Currency leverage revenue million in points

organic generated segment million, $XXX had period. in growing of increased impact from X.X%. million prior-year XX.X% and quarter. XX the basis, Currency translation of margins revenues Network the favorable Our increased $X an a On revenues the XXX X.X% basis from basis points sequentially. Solutions points of prior-year EBITDA

will I sheet you X, Slide with highlights. If please our balance to will begin turn

capital the $XXX of year end million Working reflects is our and in turns, the compared result in in the generation. deployment, at prior-year. balance decrease net turns the of and mainly X.X in period. inventory The compared disciplined decrease to quarter equivalents were fourth prior quarter year-over-year of million to capital increased cash flow cash turns The was turns and cash Our levels. year-over-year prior prior million X.X $XXX the the a $XXX quarter XX.X

$X.XX quarter offset in third Our $X.XX by the total debt debt. the end billion euro-denominated during the the of repayment billion, in the principal our was $X.XX to translation on quarter decrease reflects year-over-year currency debt slightly year, the The at billion period. year-ago fourth compared and completed

net quarter X.X X to Net flow times range end X.X Please our debt quarter, times in Slide with for was cash during to X.X%, lowered operations the year. We $XXX.X the made in-line the compared the are in times. of from balance flow improvements debt to prior was the million pre-tax of to leverage a the highlights. target XXXX. few Cash and at prior XXXX. million extremely $XXX.X our compared to fourth pleased of to with robust quarter turn X.X% at below sheet a cost the to X.X We of EBITDA our end

from in a compared quarter, quarter included for from manufacturing As XXXX million, prior-year customer prior-year in expenditures capital $XXX.X and new the million period. reminder, million increasing This the million facility settlement. Free benefited period. $XXX.X quarter and investments Net in flow cash software India $XX $XX a $XX.X products. were the a million million patent new to fourth $XX.X in investments in decreasing the was prepayments

$XX The $XX Compared prior-year, our cash increased has million decline of inflation $XXX.X For to levels. generated free we the primarily period. inventory the year-over-year higher compared million to full-year was million, $XXX.X XXXX value flow million. of inventory by the the of due to in copper prior-year

safety In footprint by is million for the stock inventory ongoing shipments. addition, of elevated holding our our temporarily as manufacturing a and $XX timing result of consolidation,

In EBITDA levels to robust expect normalize inventory addition to XXXX. our growth, we in

anticipate now to we Chairman, back remarks. turn completes our cash call be As free $XXX range I to $XXX result, my like of That and outlook. President, Stroup, to John a to John? prepared flow in this million million. for the the would CEO

John Stroup

quarter XXXX we and and with earnings, we Slide all margins expect record revenues of our $XXX EBITDA the to Henk. free also full-year growth. quality to million, of you, for be We to and turn with Thank Please million commitment to robust high XXXX. XX flow In XXXX, and record and our across Consistent cash our anticipate regarding revenues $XXX outlook $X.XX improvement expect EPS first first between quarter $X.XX. growth continuous platforms.

XXXX, the million $X.XXX year billion prior For our $XX full between billion, of increase $X.XXX $X.XXX expect an of and we guidance revenues and to compared between range $X.XXX now billion.

related increase to to concludes to the $X.XX, of of rate in guidance open continue effective $X.XX an tax an legislation. EPS This the EPS revenue includes recognition and higher a year prepared full offsetting tax representing of XX%. the to Sarah, to to call due impact new That please questions. our XX% increase remarks. We expect an delayed

Operator

Certainly. Thank [Operator first Securities. of move now you. today you, We’ll to Matt from question Seaport Instructions] sir. Global our Thank McCall

Reuben Garner

Good Thank on guys. Reuben for morning, Matt. This actually you. is

John Stroup

Reuben. Hi,

Henk Derksen

Hi, Reuben.

Reuben Garner

the in previous talk It versus guys nice a you? the from for it adjust you talk what if like revenue you what beat surprised fourth just margin a about you you pretty guidance? had maybe about standpoint, you Can was Broadcast recognition, surprised your can So quarter. looks

John Stroup

was certainly that of So orders from fourth view, an the we from exactly as say point expected. quarter – I would a

Broadcast in well. other remarks, short is segment prepared expectations. the our performed of thought on. something nice which shipments businesses focused been All in expansion, fell our did we a I team margin As the we’ve job the mentioned on that

what’s very In strong. also us, we say been and were terms have stronger surprising I that orders of orders January is than in expected would

– than XXXX entering with I we So have expected. more we’re would pardon, think momentum XXXX

were we’re XXXX positioned And think be so probably months than we three in ago. I going thought now better to we

Reuben Garner

little I X% in the Is that company-wide X%. can and quarter you I thought a orders up for up January, it was And And us tell what fourth bit, think clarify, the up again Okay. right? I January? were heard to was

John Stroup

Solutions up we quarter are the in in cases. in so basis orders hockey X% up of those the orders have both a and quarter, X% So, and businesses like month on the January end less are fourth and where of year-over-year were in at businesses linear, double-digits least are stick our up a at the Industrial of more that Enterprise far

Reuben Garner

guys And have copper Can for organic drive whether then to you the what talk moving assumed in been and year or full organic you about you growth is some it’s investments internal is? guidance talk assumption moving, perfect. I growth. the company to about can shifted segment growth I perspective? has what been from dollar organic know know Okay, the – an what overall, focus has the your by

John Stroup

for implies X% So the just and guidance that XXXX revenue growth we gave between X%. organic

Reuben Garner

guys. Perfect. it. Thank Appreciate you,

Operator

our We’ll now Stifel. Dilts question comes to you. next Thank Please which from go move Noelle ahead. of

Noelle Dilts

guys, morning. good Hi

John Stroup

morning. Good

Henk Derksen

Noelle. morning, Good

Noelle Dilts

and end underlying discuss what just Maybe first you’re markets. us of and gas, of touch in give you of in seeing I your on a was hoping cetera. sense to Industrial the kind could some mining, discreet, trends et oil

John Stroup

Yes.

So continues well. the discrete very market to perform

very new strong. up I’d we continued now in quarter It the was orders to in is sort know, the and fourth be then, information is continue end quarter. say strong the process well. performing fourth had That in year-over-year you the quarter performance there XX% the every XXXX. As of And market

The Industrial all we’re our just in about it seeing So transportation, of performance seeing regions. well process, area. point, is verticals, discrete, really every this energy, across in at performing all we’re business business, good within our

they January fourth a business, Enterprise to continue quarter, in market Our far. The are orders very take had they growth so robust share.

lot encouragement. us for reason think of I that gives a

would from say most trends. that favorable of I So are right benefiting our macroeconomic and now businesses secular

did It XXXX. optimistic about the XX%. was Broadband very is quarter. Our fourth well up in team That business

from a So view, macro strong. things of Noelle, point are very

Noelle Dilts

now terms Broadcast the IP, you thinking just update kind activity an the project Broadband, that? to us customer outside then of you’re sticking behavior? can seeing with what And you’re in give on about some of of move Okay. And just of the segment with associated how

John Stroup

Yes.

finally So their comply on open the a December so And standard. deal. with the with X, confidently doesn’t vendors can have hardware or the Broadcast do industry, move for standards. now that’s forward IP big not SMPTE, the published board is standards which Because systems customers that and to about worry selecting and

that’s So the We strongest customers. it we quarter in had be think IP-based $X ever to development. XXXX. fourth into different moving certainly an It’s quarter important revenues helpful going product million was to in and over XX was our

clear are that confident, technology. it’s our the more So comfortable customers getting more with

one as view the the open I solutions think they us really only standard. meets of that

As that what than we’ve have but well their are very the competitors have their and some systems closed more we’re what done and offering solutions talked far about, we dictates. standard

I of into from So moving is Grass XXXX. business point very product well the view think Valley that a positioned

Noelle Dilts

update the seeing the just continued both well as expand product offering and kind of of question can And customers as Great. there of into Tripwire, you’re last effort for to kind the an the Industrial then you markets? terms on me, in on Enterprise legacy what give

John Stroup

Sure.

cloud-based in for that case. business see as cloud. of to as bit made theme good typically assets Enterprise in well expect which the was growth we We some year-over-year XXXX. with sequentially, new to it our XXXX product in a fourth growth Enterprise the XXXX. saw fully is the that which Government. on-prem business do migration big will segment growth It’s products and in with within the saw Tripwire I from good of On a The our focus basis, think I on was our we’ll a hold a in off basis, Tripwire has relates the cloud-based we a So little to most continuation of as that investment. us in was progress and year-over-year the in up Industrial, services take we thought quarter good

Noelle Dilts

Great, Perfect. thank you.

John Stroup

Thanks, Noelle.

Operator

Thank from our from ahead. Genuity. We’ll Please Quealy Canaccord to question comes now John next move you. go

John Quealy

Hey, good morning, folks.

for picture you Ericsson assets. I big FOX, how you legacy as again, new question, day out think and the some well other on – for Disney, if ones, don’t that John as broadcast/media Henk, about announced mind they’re Broadcast. First talking spinning impacts relationships

how Just out you’re the talk about shake this seeing early some of the year? moving in and things pieces

John Stroup

our the media are quite relationships industry So broad. in

I all media U.S. say including primary Good in all with Disney, the We all legacy participants have the with industry. relationships would of relationships, including of companies. them the FOX,

another of movement So or us. consolidation is a to assets from vendor supplier concern really one or to not

companies they’re I getting how is profitability, I and that streams focus continue they to think with to them the through think their of to better that that think customer, streaming do more it’s pretty make ways new sports, course, ways getting And the they to more on some clear with improve as one I in media to investments of media for production. – are so. comfortable of new comfortable get monetize the assets ways people

from of the good strong in course with for the I I on very that to think I that’s also that standard development. a And think us there’s stabilization to IP, So some clarity that’s there’s, perspective happening and it’s regard fact the anyway, there industry. be my seems that think

John Quealy

energy to a couple we for the then the in another or of shown oil of part channel And with to signs do at up $XX, need mind wait all? quarters follow-up of see Thanks, guys. that as at the if any rebounds, has you perk how if don’t business talking life to

John Stroup

mentioned saw our of area. the industrial performance out all as in had before, good verticals we of I Sure. Well – so we

and grew organically at include would XX%. business look gas, that which you If business, our oil process

improvement up say which business more But which fourth at about that distribution alternative, and If the X% in in sector, seeing that to is going distribution you quarter. already the roughly energy, be look was was us would power so gas I oil and we’re for flat. transmission

our we’re the of up showing already I in would and it’s days that. expect So in numbers early still that

Henk Derksen

question. next Operator,

Operator

Certainly. Thank you.

sir. Our Longbow Please next question ahead Research. from Shawn go Harrison of

Shawn Harrison

good morning. Hi,

John Stroup

Hi, Shawn.

Henk Derksen

Shawn. morning, Good

Shawn Harrison

Wanted to Enterprise business, a may I begin. delve two-part it’s if the question into

Just gaining do you’ve of share, share market instituted they in price are terms significant a there XXXX? done in this such after the last such traction? expect again year? big into increases How you that first available to gaining quarter. heck play market, Second, job for opportunities the still of out a you taking Are

John Stroup

the increases liked. the we’ve So than increases fourth we on movement in that that have enacted price with increases. with we distributors price here with quarter bit in were increases, price a adopted some January price little would are see, typically our more however, do slowly competitors passing seen slower We follow

see for input was though, better our We XXXX. also in are Enterprise January, it’s that be bit see little our us is in however, in margins. going So than in our price I four was when to was and to increases people continues like demand what be in difficult think the the it funnel. for a to costs we order is is the I be three rate but would it feel than I more segment expected we category than months and weaker of months situation a ago than XXXX is reason better expect traditionally struggle to people utilization what than that seen. feel pass more to rising, it And demand had XXXX have able maintain to on lower

any wins from that than in in January are similar the getting both two sense of I distributors two we we that years. last are larger larger mentioned – had we’re projects any the activity. seeing And shipments had our which shipments I’ve think than are

we I to very market for stick I margins expect see in in increases as first the LAN. did the than expect, XXXX unreasonable in share I is So capture. is we relates we line way that that as think do did to our It’s positioned in XXXX. then price would XXXX market our in XXXX, predominantly me in to they team continues in going agree, it it extended that better see the the they I share, in relates in do that would And outstanding share see probably go-to-market growth, to quarter well XXXX we’re our an product job did market and we if the think but as which and as capture where areas nicely think

Shawn Harrison

gains, most U.S.-based. John, if remember, opportunity greater Is were see versus more share? international-based of XXXX market where your And I share that for ongoing in you the

John Stroup

Yes.

the think growth right. a some much States we mean in than U.S. Asia, the better continue market to share we it I of You’re in the certainly well Europe. to did and as as outside But United did did capital relates job as I share as our in U.S. we we well. expect take

responsiveness an and improvements higher of very for obvious yet usually things those not customer as is levels at I all-time growth. customer us translate So think of that the and satisfaction, lot a team is executing around well and into they well are high made

Shawn Harrison

if guidance is or Okay. were And I then for if out right. what margins still just Broadcast – missed that on then sorry XXX it year-over-year, I I my down EBITDA two for brief adjusted bit so looks math XXX correct, math were jumped like if is the my little a pushed may, basis And basis Henk, Capex revenues points follow-ups, if that. I’m is the late, XXXX? points

maybe you the So explain could there? variance help

Henk Derksen

Yes.

If of that’s still slightly mix. issue, simply mainly because off was right. that’s for adjust – margin So the and mix Broadcast – timing we

million guidance we That The faster so – bit year Grass the underway to our business have little in $XX a little is And initiatives still business. that. the million next will for Valley includes grew business be down, Valley PPC than roughly Our for Grass CapEx India. you $XX $XX million. adjust

So new well initiatives completing there as around our as manufacturing software footprint products. significant the developing

Shawn Harrison

Okay, perfect. Thank you.

John Stroup

you. Thank

Operator

you. Thank

from Sherri Please of comes Deutsche now ahead. Scribner go question next Our Bank.

Sherri Scribner

it the I’m a did kind million just been have little you. first some there’s the have I quarter you street. through of terms the of as And will in than bit people, considering understand the $XX would maybe all part year? than linearity the more give in think $XX how bit little little numbers of there, thank you quarter fourth down anticipate think, the maybe, a wrong? And that, we bit us sense year first Hi, can without translate to curious of lower Henk, I’m trying I – the a It’s would lower million? guess a of guidance.

Henk Derksen

Yes. Sherri. question, Thank for your you

XXXX $XX Let million layer in the third with we question. the part in million that $XX first me million fourth in the million QX, start $XX in of in and recognize your quarter. couldn’t we’ll recognize quarter will in answering QX $X The and

modify some take of that little of customers bit and terms will to have conditions a our with We our time.

So that $XX to that model throughout to you the that I from want reverse will if now And typical accordingly, you completely seasonality you don’t you in phased the be your million year. as feels in It very – do will you see all expect update QX. us. expect if

Sherri Scribner

How I when we issue, the about I think Okay, fiscal sort full exclude basis of to margins being that? through And perfect. seems like That’s I Broadcast year the really at adjustment the guess, it for look when margins we is EBITDA this make the helpful. then the XX revenue? were should XXXX think right points, that about additional way up when in up you

Henk Derksen

basis Yes. It’s points. XX XX to about

closer If basis you let points, basis XXX you if you adjust to XX roughly be XX, include but it, to points. up we’ll

Sherri Scribner

capital well is new your the changes, you had with that how changes any about think then debt have have debt there at And tax you all the you quickly, about And with as Thanks. want to perfect. you – return your just foresee thought strategy? as Okay, structure?

Henk Derksen

Yes.

already our debt well that’s in debt Europe. is of positioned. Europe, The in really euro-dominated trades our So actually majority is

currently the new hindrance. understanding incremental will that not So in understanding team better opportunities. there The is are be busy a legislation, where

So the And be cash At will that the going in very focus cash will opportunities a be continue of in we of XXXX, And legislation, of to XX% patriation, company of in under that repatriating more done job historically good have path new U.S. the mobilizing the has certainly, down terms our roughly end the forward. U.S. the cash. the

Sherri Scribner

you. Thank

Operator

from Mark comes Goldman which question, Delaney next our Sachs. to of go move I And Please you. ahead. Thank

Mark Delaney

Yes, for good taking the questions. morning and thanks

for the growth question XXXX segment. XXXX, Olympics so in normalize because Broadcast if think think you Broadcast, I revenue recognition, typically versus on the And about delayed if we the First here the is if coming and sorry, business are curious think especially the and Olympics Broadcast you an – to in because election start? the grows, that’s of I’m just through Presidential election here, about

John Stroup

Yes. correct. That is

make the moving that’s for into adjustment be revenue would to the So have expected XXXX. now XXXX, you that we going in if

X% We’ve also to expecting year-over-year from would year-over-year XXXX basis. growth growth on mid-term And X% than on and as correctly one. year growth year somewhere to second a you be point XXXX. our Winter Valley. the would at year better Olympics, around Broadband still in cycle, We’re the to of a the That basis in see for which elections baked into typically but includes that the XXXX. out include It Grass that’s a guidance

Mark Delaney

and you in seeing us. pickup I know if some for gas. Okay, frame it in differently bit that’s a already maybe oil helpful. Broadband you little and then, Industrial including John, talked could was wondering about And I

the oil of and revenue oil to X% was think fell like company’s of Maybe the talked something not years gas really this of it instill Because when your just early three where part understand ago two, mistaken, for XX% and that to I it company’s probably if know revenue. your I are you declined, at want point. think about I I’m business. you I being

and point? of have So is maybe gas oil just you at you where if can number this quantify kind that

John Stroup

I gas, annualizing in our on quarter was $XX think it about look and million So if that total. results fourth at you just oil

The quarter give a in was is will at kind up percentage on gas the of a nicely our basis, you relatively right $XX but and where of you this oil we now. can fourth that year year-over-year sense million business of full on small are a basis, So total. still look

Mark Delaney

that’s right, All helpful. Okay.

is I $XX in million So but what if is know expectations. came that my revenue with at revenue, end I for nicely the million, seems was it think still that the $XXX me, generally quarter to of was fourth range. of were math then company X% the was like in delayed And the back to orders consistent it it guidance still sounded like is I prepared is And which in from XQ? remarks, to just X% low right, add it commentary if the looking things the for lastly

even and just to to can in something relative the weaker bit like where guidance pushout that of seems it a So you so XQ? little maybe midpoint better explain me, downside was outside of help us was that modest

John Stroup

another but have company million lighter we high end, identified to see. in a in we businesses what Enterprise of where other what kind bit where the than shipments little a performed in little would that would excess if segment bit $XX it’s compare we we been $XX segment expected I much we contemplated had what a weaker on of I would orders with million have have the probably the you be approximately our not was mean by the Well, so might say in would addition in of the Broadcast area they say we Broadcast, much. that probably that that expected. have had high compared other in line I are the to guided end at very to

Mark Delaney

much. very you Thank

John Stroup

You’re welcome.

Operator

to go now Cihra Rob ahead. We’ll you. Thank move Guggenheim. Please from of question next our

Rob Cihra

quick can expected where of One question. still then the or to Hi, thanks on closed very terms within or just question that? and close The that thing update that quick is an Industrial? timing Is timing is you actual from the divestiture much. on a is MCS in

Henk Derksen

has just flown cash closed Christmas before Rob, QX, year-end in so on that’s that out. the and

Rob Cihra

can your when so telling that mean look Okay. And way last to reaccelerated industrial – several nicely then has maybe over mean I the is good. question broader the how tell quarters, at look any you much is automation, difference that infrastructure sort a even obviously way like yet? replace there new gas? the and cyclicality and can IoT, tell macro Thanks. like technology actually aging you the oil in spending of there versus macro I just versus thing you I continues is that revenue there of mean, to is,

John Stroup

relatively rates be of look quantify is by the and aging most pattern That to able difficult it high do that at demand latter. that there’s category, across globe piece. of and It’s product if most of utilization would suggest with it. the has equipment, there is is I fact most it it aging I you that to factories, that to the think the

we’re of said as boxes the our having factory our well. Now healthy that, conducive I/O product to machines categories connectivity our idea that UTP would much very product as there be as a growth machines and in well of smart that other seeing lines, to are

path factories, no mind there’s factories to are go products. So as products see the legacy faster factories connected the than that doubt can you in they’re growing more people for invest my newer and that begin to and down capacity, of smarter in increasing capital those choosing much

Rob Cihra

Thank makes right, All sense. much. you very

John Stroup

You’re welcome.

Operator

to go from Thank comes you. We’ll next now Please which our CLK. question, George Godfrey move ahead. of

George Godfrey

Thank XX you. Is but answered, year, it, my or next CapEx initiatives, Most a so percentage the questions that versus been like split? the is for growth of right? million is that $XX call have what XX, maintenance

Henk Derksen

Yes.

cycle what’s is as a initiatives. The at part to typically maintenance of the around majority, $XX allocated think percent I growth to will a two-thirds, be million. million $XX revenue

great a and but spoke to, us investments to position we R&D us also more help growth. India As will in initiative for software for us, future is

George Godfrey

one range? you. in shifted we back Are for organic year expect Solutions think And to Broadcast just going then that $XX to the you that X%, The be Thank to to that it. gets about that same add going give be Got out? growth how reported? And you is next or to organic million X% do how more. that do

John Stroup

segment going XXXX that towards revenues it range, based were give would what higher our versus our actual on in growth our in Broadcast because actual to organic we’re we report I in to maybe So expect the XXXX. be end, our when revenues in XXXX,

going So have tailwind a obviously, of XXXX. is coming our to into Broadcast lot segment

expect of going maybe our The around to into the maybe a all that X%. be So higher coming fact have I million maybe end, year. somewhere higher revenue of X% the would they segment given bit on that that Broadcast platforms little $XX are X%, the to

George Godfrey

you. Thank

John Stroup

welcome. You’re

Operator

go from ahead. Thank you. Kesireddy our Please to We’ll JP Morgan. now question move from next Ashwin

Ashwin Kesireddy

question. Yes, hi. my for Thanks taking

a quick Just clarification.

You comment you this activity mentioned on segment but how about in strong can XA performed? Enterprise CAT the

John Stroup

So consistent sorry, year business I’m sorry. up in business for about I that our the year-over-year connector the the quarter, the was I revenue full tell quarter fourth that have I CAT I’m XX.X%. total if in so a quarter our on It with XA, CAT CAT fourth XA have our not The substantially. basis it handy, though sorry, revenue – overall, was you can the sure fourth was up connector It in – flat, our was up about it but XA up XA in was Oh, substantially do XX.X%. fourth the – quarter. was CAT the was

in I me. front it Sorry, had of right

Ashwin Kesireddy

Any other one particularly Solutions ability relates Industrial solutions Can terms around there? progress in are seeing IoT. seeing cross-selling you’re as into activity Just any question of the security side. you comment on activity Network to the on segment there you it any or

John Stroup

Yes.

was cybersecurity a segment industrial full our year nicely. business So up the basis, on in

would includes make our that what full line, that Tofino our was the EAGLE XX%, a EAGLE year a business on our Tripwire, includes product And about think solution up firewall, product line. aspects bringing our in. business year progress that I of it And include all includes cybersecurity full – Now Tripwire in basis. we we call that good it to Hirschmann basis on continue

So the stronger that part growth expectations in just is XXXX. of we’ve Tripwire be high suite that, that software that And got mentioned I before. will

Ashwin Kesireddy

Thank you. great. Okay,

John Stroup

you. Thank

Henk Derksen

you. Thank

Operator

continue. at time. further are Maczka, Please Kevin this there no questions

Kevin Maczka

you, Okay. thank everyone, joining Sarah. call. for Thank And today’s you,

our IR great Thanks, have team questions, out the any email Belden, investor.relations@belden.com. is have to please reach address here you a If day. at

Operator

and gentlemen, this our call concludes Ladies you. today. Thank for

call, participating. may You thank from now for and you disconnect the

Belden (BDC) 1 Feb 182017 Q4 Earnings call transcript