BDC - Earnings call transcript Q4 2019

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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. instructions] [Operator

like ahead, conference sir. now Maczka. to turn go Please to would over the Kevin I

Kevin Maczka

business, quarter call. Thank CFO and President, detailed thank I'm Treasurer. strategic us fourth will With Stroup, John Chief you Mary. our will Chairman Belden's overview for Derksen. a operating earnings you, will provide Good Investor morning joining provide today our morning, Vice President Roel segment me for Relations Kevin this name CEO, is and My Operating everyone, of our Q&A. and John Henk Vestjens, Henk and of followed XXXX Maczka; results, review Roel conference and review Belden's then by results, Belden's financial Officer and of a are

and these earnings prepared investor.belden.com. online are on this at We release have presentation we presentation, morning, release, prepared of press this earlier and will we that our transcript remarks call. reference slide a available issued currently The

to the Turning presentation. Slide in X

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

closely adjusted during For call annual report website a our financial information presentation additionally, please relations GAAP of and management communicate. investor release information section our associated with most more we Form financial reconciliation information. our XX-K. contain will the review information, on In financial appendix to today's press or to of reference the accordance G, non-GAAP today's Regulation and non-GAAP the the

CEO, John? to call turn Chairman, and John the now will President, over I Stroup. our

John Stroup

good and morning, Kevin, Thank you, everyone.

Slide adjusted be Xin results As our today. Please referring I'll turn to a to presentation. reminder,

morning Valley. I'd quarter fourth like made announcement discuss of Grass our divestiture we the to review I regarding the performance, Before this

our portfolio we businesses of concluded last Belden. the to Valley and it of our strategic completed of best we was interests customers, separate rigorous Grass shareholders, and from in As that a review employees reported quarter,

expected agreement definitive will half Grass XXXX. seller's Black various opportunities. Valley look we to equity upfront to five-year the to million Grass up strategic during reached effectively transition. subject its Dragon term, to forward forms in Grass a announced private in and the Black its Dragon we pursue to close and experience a firm million adjustments, the Black payments. broadcast $XXX Valley is on growth transaction of and seller's first sell Today, plan We five-year Valley plus $XXX execute consideration, The over deferred industry includes enable earn-out that to $XXX transaction in XXX% to payment deep The supporting the teams Dragon's PIK more of note of consideration of $XXX cash million an million including note, certain interest potential Capital.

and seller's seller's performance are These note earn-out certain the note but based payments interest not. thresholds, on the are on the

We excited continue for the pleased Belden definitive announce going we opportunities are to about as transformation. this agreement our and forward extremely

Now, guidance the let's in of of performance. the our exceeded quarter quarter $XXX.X million Revenues our high fourth range. review fourth end

channel $X.XX fourth channel in the We healthy guidance not organic of the for X.X% potential quarter that did we see This end reduction quarter. the improved of Importantly, high our guidance exceeded after inventory we changes $X.XX levels in our for first of $X.XX. to anticipated that the also expectation quarter reflecting our inventory businesses. range levels of in XXXX, are the demonstrates the of XXXX. of so EPS we of delivered portfolio growth growth in in adjusting fourth enhanced

our is $XX business systems called million. XG or Special applications our fiber strategy, already base of and for current for enclosure complement with products the with fiber our Consistent customer another supplier M&A and Company, to SPC's SPC, of fourth quarter million. being global a in $XX SPC a broadband SPC our products. with we accelerate many utilized approximately acquisition growth. opportunities in see completed of of outside-the-home leverage We fiber products significant with bolt-on Product SPC's revenues annual related broadband conjunction portfolio,

continue in would this opportunities a In pursue market number our of potential. to enhance offering compelling we further growth addition, inorganic that and product robust

secular approximately following automation, to reduction smart These favorable for review. of program, slide will Valley, Grass copper strategic $XXX ongoing of undifferentiated the & is product X cable turn in aligned $XX discussion actions buildings. full a year we portfolio businesses results.XXXX by and divestiture result significant that actions the million of in was include broadband million These an cost Please industrial cybersecurity, portfolio of our planned brief lines. XXXX and trends our highlighted in comprehensive with the exit initiated improved our XG,

and $XX Full of demand solutions capacity initiatives of number organic our were by shortening customers and the in capital our in growth cybersecurity year. Net disciplined year another $X.XXX meaningful support headwinds included expanding additions revenues a from future global year capabilities. that policies, for trade billion. during to expenditures share balanced Despite new expected to million both was repurchases. acquisitions, increased investments of products fiber and are for times XXXX end software This deployment organic capital automation, toward industrial drive investments, funded the and periods. growth attractive our our and lead targeted

$XX in FutureLink SPC and broadband quarter. XXXX completed purchase in the These for in million. second combined and line strategic product price of quarter fiber Opterna fourth a acquisitions included the We the three

majority mix came product the to XXXX. of first revenues products as our higher-growth our Importantly, from broadband outside-the-home improve, the in for continues time

toward share also we deployed During the million repurchases. year, $XX

accomplished was of stated of X Moreover, our coverage exceeds our Xx provide of All our net interest to will within I a to ask year-end results. ratio range well debt now is to business review of EBITDA. net This Xx. X.Xx Roel? times. Roel financial leverage segment this with

Roel Vestjens

be referring turn John. to will to I review Beginning adjusted a Enterprise our you, X results Solutions segment for results. today. Thank Please slide segment, of our with business

audio, Enterprise our a As complex to enterprise and secure data across and networks. transmit reminder, solutions customers video allow

Revenues for an buildings inventory include Our basis organic markets XG. to increased Revenues key X.X% million, in in broadband market after segment in and organic this in capture and the smart on inventory, channel changes on growth the share or changes channel X% all when an continued levels. with adjusting solid year-over-year Americas. X% building regions in increased for adjusted $XXX.X and in smart basis

Revenues organic in Broadband an X% & year-over-year on XG increased basis.

We optic for continue to fiber robust our see demand products.

product our fiber offering of we integration successful broadband the capturing share. are and expanding additional significantly Following our acquisitions,

year growth As were margins strong revenues with Solutions Enterprise our throughout a a result, EBITDA more fiber on doubling XXXX, full basis. segment was than XX.X%.

to our and video allow this environments. segment. secure customers harsh Industrial but audio, now industrial Enterprise, transmit Turning and Industrial to solutions our like data, in in Much case

segment in million. Revenues basis markets Our key include to facilities, manufacturing, an organic mass also channel transit, on and adjusting X.X% increased process after levels for $XXX.X changes discrete energy. this inventory in

to remained X% portfolio discrete businesses. in quarter, expected Demand industrial balanced in the largest with discrete during our manufacturing. in continue from a continued quarter market Revenues of the We soft softness as Germany. declined fourth the benefit industrial market, in

order XXXX. recent pressures readings manufacturing the the PMI our soft in Europe, United industrial expect and and the economy, persist discrete the the global Given in into in to uncertainty we States trends, continued

our market, revenues, by we our Non-renewal end fourth X% to led of Cybersecurity our improved However, bookings, in indicator continue our organically industrial growth quarter. see the the increased business markets, X% which leading Performance best process in fourth in other increased in quarter. year-over-year.

XX.X%. to were We result. cybersecurity. expanded segment solutions, software-as-a-service margins with SAAS Solutions EBITDA in our progress XXXX We strategic a make revenues in continue significant Industrial our priorities doubling with as

like I Finally, progress are would our to we reducing making levels. discuss on the inventory

$XX million declined $X completed despite year. and quarter the Our the sequentially million the year-over-year, fiber acquisitions balance fourth million addition from inventory of $XX broadband during

quarter X.X period. to turns inventory in the in fourth result, X.X from ago the As turns a turns improved year

half continue execute our turn we increase further As of and enterprise would approximately proven Lean in principles, XXXX. improvements an to we expect one

Henk will insight into our additional Henk? to now fourth ask financial performance. quarter I provide

Henk Derksen

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

today. be will As a results adjusted referencing reminder, I

turn million detailed by X.X% the After further quarter prices. Revenues the prior-year of $XX.X from impact was X $XXX.X in a favorable from $X.X organically from as decreased copper XX negative Revenues million, XXXX. inventory, acquisitions in for for were or million prior-year. consolidated a offset $X.X impact lower changes million a partially in adjusting channel the Please period, quarter, decreasing translation the X.X% fourth and basis currency $XXX.X organically increased from from Slide to review. million points, revenues

own inventory EBITDA the to in profit margins million, XX.X%, consistent exchange $XX foreign were basis product to volumes $XX.X fourth At in Net compared lower at we inventory million. with XX.X% the $XXX.X current interest the XX.X%, expense as year-ago levels million. basis as mix. decreasing $XX.X were or related the and well in to year XXXX XXXX. period. was million EBITDA Gross XXX XX.X%, prior-year points interest quarter period approximately consistent margins points was XXX with decline in from production channel compared in declining rates, our the XX.X% due period. period in expect million, year-ago in to expense decreasing reductions XXXX $XX.X ago be at This higher the unfavorable to balance, quarter was

of as in for effective the and XXXX, year rate Our a fourth initiatives. from was incremental XX.X% tax number quarter planning XX.X% discrete full tax the benefited we

quarter, we purposes, XXXX. an the using was were rate $XX.X the recommend compared throughout in Earnings year-ago per Net million effective modeling tax in share period. the to $XX.X XX% in $X.XX For income period. million, financial quarter in the of $X.XX to compared prior-year

Slide segment. to revenues X. discuss turn operating I by Please results now will business and

quarter, increased million $XXX.X After Revenues Enterprise were changes acquisitions. of period. inventory acquisitions Solutions related points were contributed impacted year-over-year million the revenues revenues year-over-year the quarter, Lower basis. X.X% favorably and segment for XXX volumes to from by period. to in in the generated prior the a ago X% changes mix increasing channel in and decline. $XX.X on prior-year the levels in year-ago organically the period, year decreasing channel unfavorable from production EBITDA the adjusting year product during from basis XX.X% inventory margins period higher in Our

Industrial a on the inventory sequentially. $X.X points for had generated basis Solutions XX.X% year-over-year copper million. organically in increased decreasing increasing year-over-year X.X% After changes year-ago of quarter, a the The revenues declining adjusting basis basis. in in channel impact in translation X.X% prior-year $XXX.X and XX segment negative prices XXX quarter, factors million were and of and margins EBITDA the these revenues period. Currency period, points the from

We make cybersecurity our which growth such in investments in strategic to Cloud-based periods. drive future continue are solutions, as new to products, expected

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

year-ago million $XXX the period. in the equivalents fourth compared million was of at turns, end the quarter the to to quarter XX.X cash quarter the cash XX.X balance $XXX the turns sales prior turns million were consistent the quarter X.X the days to days turns in X and turns, were and compared improved and year Days year in capital the prior in period X.X and in Our XX at Working sequentially. and third outstanding compared $XXX turns Inventory prior-year. in period. turns were X.X prior turns X.X prior with

was Xx Our quarter billion, Net was fourth of EBITDA total at net debt principal target debt year-ago leverage period. the in-line line of with range at end Xx. X.Xx the the the in with quarter, of to the end to our $X.XX

XXXX. As rate of with no fixed interest average entirely a is debt to until at maturities our X.X% an XXXX reminder,

balance pleased sheet. very our with of are the We quality

Please million highlights. prior-year capital fourth million to quarter million prior was period. few quarter, from for from turn was with in in flow Slide $XXX.X the operations cash compared X million, the the million, were the prior-year $XXX.X in to $XX.X for period. flow year the Net consistent $XXX.X expenditures $XX.X the flow compared to cash Cash period. Free a quarter

generated For of million the cash to $XXX.X million, XXXX. $XXX.X full from compared operations we XXXX, year in flow

reminder, a XXXX litigation. non-recurring benefited of As related patent gain million from $XX a to

this item, cash Excluding flow XXXX. XX% from in increased operations

million capital in the $XXX as initiatives. increased million growth from expenditures $XX year, increased our to For net investments we organic full

capacity targeted growth to This included support initiatives. our and fiber additions in new investments software solutions

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

John Stroup

taking XXXX shareholders very going margin XX continued of Slide but ability Belden. $XXX XXXX appropriate revenues of year Please expansion. superior to $X.XX. are first our to our million outlook. $X.XX are goals about will I Henk. Company for am $XXX forward. our to meaningful you, turn the to anticipate optimistic be and be Near-term XXXX returns significant Thank trends for and actions a quarter transformation position and We demand drive financial achieve challenging, for to our growth EPS and and we million, between for

we between $X.XX.For For share $X.XX $XX M&A financial be revenues $X.XX for the tax does of million the potential modeling XX% to to EPS full rate and and guidance recommend expect of year not year approximately benefit effective we and from an expense purposes, XXXX, XXXX. full transactions $X.XX any billion, or This using billion contemplate in XXXX. of repurchases interest

we will copper products. the continue formally to we exit contribution cable However, million until those $XXX undifferentiated product the include lines of in

revenue Please from we to our end completed SPC. bridge the expect results high a guidance. $XX realize our acquisitions incremental slide including turn XXXX to that to an for in XX XXXX, the XXXX, from In in walks of million XXXX

previously, the guidance that so fourth that expectation inventory expected, we reflecting in As are we see XXXX. reduction levels in in our not we the channel mentioned I did quarter for

full of million. Our approximately will our much $XX we that channel represents organic for for pursue growth to adjusting be reduction a turn improvement turns, the at After as X range. assumption approximately end which inventory planning expect as the high our items, these guidance levels of is year in inventory X% channel in a partners

in savings on SG&A $XX represent program. savings EPS. least track million realize in incremental These $X.XX our million at are $XX an cost We to under reduction

call That to and EPS remarks. addition, concludes our In the please $X.XX improved from Mary, expect open another productivity we questions. prepared our benefit mix. initiatives

Operator

[Operator Instructions]

our first take Noelle go question will Dilts Stifel. Please ahead. of from We

NoelleDilts

quarter. Hi, good everyone. a congratulations And on

enterprise to I first about the thinking us you growth was detail guidance. by about more just get XXXX EBITDA -- little the of give are hoping bit full So XXXX? segment for also to and you relates Could are for industrial organic sense a you as how a thinking both the on it for segment year margin and how

JohnStroup

Yes.

that we to on revenue X% we So to a expecting be are XXXX, enter up as is consolidated basis. flat going

into remain will are We least market weak discrete expecting year half. the the first the at going that through

a We expect though in business feel And half continue. the the mix we that performance about we the outside our the home But it also forward. basis, with consolidated the segments us more channel expecting changes with will going momentum adjusted same. you in help broadband at two we if the second we're the will achieved is broadband be made by the that substantially just that on to look our will

end So up broadband. America the as roughly most I enterprise to performance very discrete verticals watching growth we've industrial sort see side, good anywhere from in closely XX going we're just bps and mentioned, to North coming to then whether and one the point of continued of on Enterprise think on three Roel the with high in other the improve. And

cautious had sure with demand and also And then we're pretty how pretty about in of I might course fourth affect now how think, were Noelle, compete with the Coronavirus in guided. Asia. discrete in right Asia lot quarter of a folks that not we that tough discrete in the they that other numbers they

So we're coming being into cautious XXXX.

NoelleDilts

assumptions To inventory then coming at you're this what Great. looking That's in in at Wesco the are And Does that contemplate helpful. consolidation Anixter it turn your you're reductions does within together? turns just for the from into that year? the and impact one improvement that with channel. play expecting expecting expecting inventory the extent the

JohnStroup

does. It

will that outstanding quarter could. awful what sometime probably that about both lot to based though So in hearing that that times try looks the we're completed incorporate third Wesco certain as on closely. communicating lead we maybe as best before. to They so in got it good. we be their bit acquisition as an Anixter, with and customers making care we're a relationships are We little We've

would and anything rash acquisition to so to going clearly to centers So for we're significant, can distribution they're the try we do that expect part of they their not improve expecting all to the that be turnover. improve there'll rationalize thesis but efficiency, inventory to is or try

contemplated So at $XX by channel of in with closely reduction any but fact acquisition impact we're include from them, Wesco. Anixter partners of going our to million the inventory the yes work does

Operator

Please take our Research. of Harrison will Longbow We Shawn next go from question ahead.

is line Your open.

GausiaChowdhury

morning. the that regard Good you With Hi. is is Anixter Shawn. million combination? on from how delay Westco and for channel break fourth to Chowdhury the can Gausia This much $XX down reduction the versus quarter

JohnStroup

Well.

So we don't know exactly.

So reduction occur. million quarter there we fourth the had that be didn't that much $XX as a as thought would in

And put million a partner so that By a think year, and one the in Westco year fact with year to the level. But typically. We've we don't out exited would going a inventory partners it's would we include but that turn little by don't Anixter of have much We probably the full we million the happen. know QX it We that bit just event most guidance, our was think given given exactly thought on roughly be think play at it way seen than never and into obviously an to basis. would $XX more some they we I we consolidated how a a that million by prudent the channel of partner. change partner. our $XX $XX think

GausiaChowdhury

they you. about Okay. wanted I mean? that might Great. what nonrenewable and I the color growth. a just there provide to some And were-- modest Thank think Can then ask there's bookings you

RoelVestjens

Sure.

increase. QX So We're dramatic to Roel. this pleased a is see sequentially obviously after and very

are we XX% of growth I areas. described much segment a prepared The pretty the up my government in sequentially all grew' same QX, our non-renewal as increase grew in pleased remarks modestly Industrial, substantially. year-over-year. was fact, matter bookings to As from QX

that within pretty was amongst verticals cybersecurity. various we have it spread So the

Operator

go Sachs. ahead. Matt from Delaney question next of Our Please Goldman

Your open. line is

MattDelaney

the thanks for And questions. taking morning. Good Yes.

sale And announced. XXXX was capital assume M&A the think how any talk you on allocation. allocating about you. assuming the share is proceeds? repurchases, company about or question Thank Can I first understand as those Valley guidance The completes but the Grass doesn't potentially you as

HenkDerksen

Yes.

would So is be to balanced. unchanged. I We allocation approach capital continue to to think our expect

the in prioritize Valley market our we've being or morning. little organic million We divestiture negotiating forward because again. we'll while expect this We've fact of So of would year. around to Grass initiatives. out repurchase look a the that $XX active a $XX to million We for that somewhere been be the we announced that been of share

we we stay look stock fiber be automation. continue to within cycle; going But to So expect leverage it's is and as industrial opportunities forward undervalued buyers three. Xx assuming nudge it the and would balanced. to that bolt-on be years, how commitment will both of the broadband Xx well are we two acquiring certainly I given of sort going like in last the within more towards very than We're two our as might late to

creating we've we million with of on another of million done, lot year's lot So we'll that all divestment and of to what a that to last of capital focused did cable getting about products; a time $XXX be I We're bolt-ons our planned divestiture announced, Valley, would you year that in the reduction; of in to balanced cost integrate. value very a we for year allocation. undifferentiated going three Grass the need $XX talk shareholders expect

MattDelaney

expected situation some holding quarter. last think channel inventory I the the inventory hoping to question, Thanks. reductions you customers What company that fourth levels to see to in That's inventory the was occur. better my that but understand led didn't higher follow-up Thanks. quarter? do of And And for materialized I had helpful. understand

HenkDerksen

varied by think it's I partner.

the quarter. cases we to reduce bit them they providing might when the with some little inventory for to the quarter our all how a of were of obviously to communicated about quarter. partners been too We in optimistic forecast in prepared all going for think I you our fourth guidance have much prior fourth

bit just too a might some So of optimistic. I think them have little been

and at the start they maybe then a of more that the Some they they thought to inventory the of end or I and realize rebate think little decided decided the so quarter. of the quarter had them at get earn to bring

out obviously, system be be We inventory are. certain throughout able difficult, very up because know levels. obviously when to control track $XX could a it's have to think So they're really XXXX. to the to going --for for adjust good levels certain it's their that what being to year and million our able But those in it of we how

predict ability the Our to little challenging. But typically first fourth. bit in quarter the to compared quarter they a always inventory the is reduce

in think first of XXXX went million. I it quarter $XX down the about

of went that and it wouldn't of if would be be the down million so first in $XX to XXXX fairly any quarter similar And us. surprising

Operator

our Dorsheimer now We take go ahead. Please Canaccord from next Jonathan Genuity. question from will

open. is line Your

JonathanDorsheimer

not the terms frame but we China. on of market just and It's side Thanks Hi. about the-- I dig also in could just exposure the and on and perhaps understand then that like I the to quarter. the how a congratulations bit better help story, of have direct on maybe, in words you am the I I I newer follow-up. a if thinking guess to exposure Chinese the exports enterprise's, out but And terms time also if to guess In for basis into of be a indirect. inability the too. should industrial other me

JohnStroup

view we So in not a China, some from of lot. point have a exposure demand direct although

indirect. good question one think I your is about a

factories Europe It deploy So to installations impact on the factories could have their on out either not of producing an for their certainly also Germany. labor ability in could and demand are in that to out extent China or of effect have an that buildings. machinery into

couple see a our any in Belden's lot QX us It's think predict. demand if to not we surprise therefore, case, for me very for situation. It's of production dynamic I same for to case And obviously customers our the a China. It some So QX. It's running of going from again of might I to volatile. a push that's not in difficult up wouldn't have of February back we're the know and until XXth facilities. example in

not is to pay to most would underexposed situation going to I We're and to to this. we're it. our close watch Those that are immune like a obviously orders the of going out attention global that point also exports impacts say Germany companies certainly I close But to of of of attention compared things going sort we're Belden We're pay very know. from at the shipments any I in and probably China. going from look a good to we're China. supply bookings very out shape. pretty We're think into chain to view

I'm other So not overly hand paying concerned close about it, we're the but on to it. attention

JonathanDorsheimer

And China help impact follow-up me thought Thanks. the channel you're it. a on that exposure you but in impact the then or Have as drawdown. I assume, gauge case, to terms I may would not with of that on might just whether channel terms relates how correct to have terms it but I'm levels? sort in please some inventory an how if more indirect, the if drawdown. you of Got direct a that's expecting in as inventory. if could through that greater was of in wrong wondering provide And maybe of metric competitors

JohnStroup

have pretty the obviously a what information. and great to partners. to special have would we got of make and that Henk why may in have our competing partners hold at team tracking channel export consolidation into We've cause is been a XXXX, in we that that a with reason little visibility the good of inventory. most our typically We've channel struggling system to might that our bit a United more their be they a hold inventories the be channel time. So States our two channel United States for folks largest which accurate to we're levels the and inventory products long extent certain partners

So not felt in us we our level inventory irresponsible reduction. guidance be for of channel just entering would XXXX some like to include

$XX that don't if One was we make everybody information be And we and be That's a we'll be. likely I'd be certain is that than more very that. surprised what number but you going just know it's give to we million. it were Obviously, would exactly think that, with wanted how to term continue than less for lot. growth the transparent you'll delivery to We of includes I delivery about certain course, attention be partner service for that's financially also or on-time foremost. to to set and where adjusted channel need our consideration close We're partners make our just going to that very my first for This on-time customers. channel a in XXXX. our levels really from they pay expectations channel to to is partners. view to

Operator

We next Chung Morgan. take our go Paul will now of Please JP question ahead. from

is line open. Your

PaulChung

Hi. my Guys. taking question. Thanks for

So past. kind we for flow operating fiscal flow, as of one-time for first charge, and kind the about just should mentioned you on believe test there up I any the cash cash some in think of cash for XXXX year are we year. charges expect charges restructuring year the

cash of stand? levels, CapEx some flow what impact of the expect Valley, and change sale do still there we And the your of So with of there? kind seasonality those any should Grass kind

HenkDerksen

of about so of Yes. free flow includes flow of the operating million $XX that and This approximately inclusive end cash is expect guidance of restructuring. we cash is of million cash million At $XXX flow Henk. $XXX a at high million CapEx, XXXX that for $XX

will a same result it as seasonality saw the the will Grass of divestiture the So we change. not of in XXXX. as Valley be substantially They about

PaulChung

type or buybacks the sale should the of you expect now share kind Great. buybacks up that. fiscal year and we levels on with somewhere levels some or XXXX assets between? guys for follow And cash XXXX cushion of to of in Thanks share and have then

JohnStroup

with as expect is Well, I the to buying we're our would things our that two a announced, see Grass to given as our obviously million team management in long we'll I which re-rate leverages are $XXX of then be shares think Valley I year. as our peers. $XX us trading wouldn't in to And kind long confidence in currently at plan, today as within divestment I quarter that it given be that my but exceed of us up if those a a expectation. true back expect strategic new and we've how our range, million would stated portfolio. has announced to conditions discount the the the board wouldn't expect But exceed the and that. to us

I think it's XXXX. reasonable in buying to expect the be we'd stock

PaulChung

or of with the then you you. portfolio more of all guide is does any your you moving get to is focus inorganic Great. copper areas deployed pieces question more from year-end investments? and the are Okay. the include assets which last Thank with And contributions or portfolio organic Whether kind that comfortable the as excluded?

HenkDerksen

that announced includes guidance XXXX a product lines that process provided the to we divest. try for the to So we've

if So happens, from obviously guidance. it's that now we exclude but and included XXXX would it guidance, right the in the when

in In our organic We're we see an priorities in as focus. I investments also automation on to any on you industrial initiative cybersecurity in and we our the home industrial of very assets initiative. focused on inorganic very on fiber focused our think very did where from get inorganic, our XXXX, and That's our would And industrial focused broadband XG. bolt-ons. broadband view, we're terms both outside based on XG, continue then within automation point the organically and nice of

Operator

Fox Steven from ahead. go question next our take of Cross now will Please Research. We

open. Your line is

StevenFox

if questions, Two morning. Good please. I Thanks. could

modeling proceeds to And some Valley What's divestiture. what and XXXX given follow-up, So timing on And of total the guidance? sort we versus of the Grass how enterprise then much broadband evaluation of be. the everything can would what-- reset mix the out time? that's payments? receive to about that of you and to would the your breakouts reasonable and the you just the what think out us work How then a a other figure are proceed, way expect on? Thank going for on you. products earn be enterprise First can growth out traditional sales over now as

HenkDerksen

This Henk. Steven. is Hi,

On the Grass four Grass Valley proceeds. question, there to components the are Valley

there cash of of upfront, of So some a tied not both are and to $XXX is $XX performance. those any seller's million note million

out An to it to pack not and million $XXX year tied So million upon paid is seller's $XX in year five of tied of criteria. a period. earn million then We essence note performance. The these performance year another over $XXX a is five period. interest in kind doesn't earn this now could

valuation, the note. think best It's about think It's about to million. Steve, I $XXX $XXX way a one is revenues. seller's million $XXX times at million to So about

StevenFox

Okay.

how So you proceeds. you depending just or get and think may business $XXX the about does more may then the on million

JohnStroup

be that And it's Steve, thing. concerns roughly XXXX And organic environment with roughly note, about some with regard to covered. so to also had to since and then of businesses your smart buildings second that buildings connectivity macro. industrial and Within obviously roughly year. we macro enter enterprise going on a broadband know relates it instead the each. I X%% you platforms, XX%, we're are that this enterprise, expecting growth companies on number the the between obviously question, Coronavirus equal. It's platforms the the call we be XX% business lot enterprise is that's dependent in probably A smart the about to of in as would for somewhere X% you for expressed broadband/XG X% going X% that as to currently to wrestle had XX% those we've the to had to is going be what

numbers. view, of these business, to stronger going we're of XXXX, So it's point POS enter obviously, a goal I a entering but the as secular relates from QX expectations very and have. probably to our to strong thought we people would think And that's cautious obviously setting little XXXX we're than the it of some we beat had trends because

Q&A End of

Operator

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

Kevin Maczka

Mary. you Okay. thank everyone for call. Thank you, today's And joining

please reach Belden. team If you to questions, here at the IR out any have

investor.relations@belden.com. Our is Thank email address you.

Operator

you, concludes call ladies our and gentlemen. Thank today. for This

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

Kevin Maczka	Vice President, Treasurer and Investor Relations
John Stroup	President, Chief Executive Officer and Chairman
Roel Vestjens	Executive Vice President and Chief Operating Officer
Henk Derksen	Senior Vice President, Finance and Chief Financial Officer
Noelle Dilts	Stifel
Gausia Chowdhury	Longbow Research
Matt Delaney	Goldman Sachs
Jonathan Dorsheimer	Canaccord Genuity Corp
Paul Chung	JP Morgan
Steven Fox	Cross Research

Belden (BDC) 4 Feb 202019 Q4 Earnings call transcript