Belden Inc. (BDC) Annual Report (Form 10-K) for the fiscal year ended December 31, 2024

Press release·03/02/2025 04:45:34

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The financial report for Belden Inc. for the fiscal year ended December 31, 2024, presents a mixed picture. The company reported net sales of $2.3 billion, a 5% increase from the previous year, driven by growth in its Industrial and Enterprise segments. However, net income decreased by 12% to $143 million due to higher operating expenses and a non-cash impairment charge. The company’s gross margin expanded by 100 basis points to 34.5%, while its operating margin contracted by 150 basis points to 6.2%. Belden’s cash and cash equivalents increased by 15% to $343 million, and the company generated $143 million in free cash flow. The report also highlights significant developments, including the company’s strategic initiatives to drive growth and improve profitability, as well as its ongoing efforts to optimize its cost structure and improve operational efficiency.

Overview of Belden’s Financial Performance

Belden Inc. is a leading global supplier of connection solutions, with a focus on making connections that unlock possibilities for its customers, their customers, and the world. In 2024, the company reported revenues of $2.46 billion, a 2.0% decrease from the prior year. Despite the revenue decline, Belden remains focused on achieving its long-term business goals, which include mid-single-digit annual revenue growth, incremental Adjusted EBITDA margins between 25% to 30%, free cash flow margin approaching 10%, disciplined capital allocation, and annual Adjusted EPS growth of 10% to 12%.

Revenue and Profit Trends

Belden’s revenues decreased by 2.0% in 2024 compared to 2023, primarily due to lower sales volume, which resulted in a $141.3 million decrease. This was partially offset by contributions from acquisitions ($72.9 million) and higher copper pass-through pricing ($27.6 million). Currency translation also had an unfavorable impact of $10.1 million on revenues.

Despite the revenue decline, Belden’s gross profit only decreased by 3.4% in 2024 compared to 2023. This was primarily due to the changes in revenues discussed above. Selling, general, and administrative expenses increased slightly by 0.4%, while research and development expenses decreased by 3.5%. Amortization of intangibles increased by 20.9% due to acquisitions.

Operating income decreased by 16.1% in 2024 compared to 2023, primarily due to the decrease in gross profit, the decrease in the gain on sale of assets, and the increase in amortization expense. Net interest expense increased by 13.9%, and income from continuing operations before taxes decreased by 20.2%.

Belden’s Adjusted EBITDA, a non-GAAP measure that excludes certain items, decreased by 6.2% in 2024 compared to 2023, primarily due to the decline in revenues, partially offset by benefits realized from the company’s productivity improvement initiatives. Adjusted EBITDA margin remained strong at 16.7% in 2024.

Segment Performance

Belden operates in two segments: Smart Infrastructure Solutions and Automation Solutions.

The Smart Infrastructure Solutions segment saw revenues increase by 1.9% in 2024 compared to 2023, driven by contributions from acquisitions and higher copper pass-through pricing, partially offset by a decline in volume and unfavorable currency translation. Segment EBITDA decreased by 6.0% due to unfavorable mix.

The Automation Solutions segment experienced a 5.2% decrease in revenues in 2024 compared to 2023, primarily due to declines in volume and unfavorable currency translation, partially offset by higher copper pass-through prices and contributions from acquisitions. Segment EBITDA decreased by 6.1%, also due to the decline in revenues, partially offset by benefits from productivity initiatives.

Strengths and Weaknesses

Belden’s key strengths include its position as a leading global supplier of connection solutions, its focus on innovation and technology, and its diversified end markets and geographic exposure. The company’s long-term business goals and commitment to productivity improvements also demonstrate its strategic focus.

Weaknesses include the company’s exposure to currency fluctuations and commodity price changes, which can impact its financial performance. The decline in revenues and profitability in 2024 also highlight the need for Belden to continue executing on its growth and efficiency initiatives.

Outlook and Future Prospects

Belden remains focused on achieving its long-term business goals, which include mid-single-digit annual revenue growth, incremental Adjusted EBITDA margins between 25% to 30%, free cash flow margin approaching 10%, disciplined capital allocation, and annual Adjusted EPS growth of 10% to 12%.

To support these goals, the company will continue to invest in innovation, pursue strategic acquisitions, and implement productivity initiatives. Belden’s diversified end markets and geographic exposure, as well as its strong market positions, position the company well for future growth.

However, the company will need to closely monitor and manage its exposure to currency fluctuations and commodity price changes, which can impact its financial performance. Additionally, the company’s ability to successfully integrate acquisitions and execute on its growth and efficiency initiatives will be crucial to achieving its long-term objectives.

Overall, Belden’s financial performance in 2024 was mixed, with revenue declines but strong profitability. The company’s long-term outlook remains positive, but it will need to continue to adapt to market conditions and execute on its strategic priorities to drive sustainable growth and shareholder value.