Belden(US:BDC)2025-02-13 20:47Financial Performance - Revenues for 2024 decreased by $51.1 million to $2,460.98 million, a decline of 2.0% compared to 2023 [153]. - Gross profit decreased by $32.7 million to $922.22 million, reflecting a gross profit margin of 37.4% [153]. - Operating income decreased by $51.1 million to $266.46 million, a decline of 16.1% compared to 2023 [153]. - Net income attributable to Belden common stockholders for 2024 was $198.433 million, a decrease of 18.2% compared to $242.759 million in 2023 [241]. - Adjusted EBITDA for 2024 decreased by $27.3 million to $410.77 million, representing a margin of 16.7% [171]. - Income from continuing operations before taxes decreased by $57.8 million to $227.94 million, a decline of 20.2% compared to 2023 [158]. - Total revenues for 2024 were $2,460.979 million, a decrease of 2.1% from $2,512.084 million in 2023 [241]. - Gross profit for 2024 was $922.222 million, down from $954.966 million in 2023, reflecting a gross margin of approximately 37.4% [241]. - Operating income decreased to $266.460 million in 2024 from $317.518 million in 2023, representing a decline of 16.1% [241]. - Net income for 2024 was $198,414,000, a decrease of 16.2% from $242,556,000 in 2023 [247]. Acquisitions and Investments - The acquisition of Precision Optical Technologies was completed for $289.6 million, enhancing the Smart Infrastructure Solutions segment [150]. - The acquisition of Voleatech GmbH was completed for €5.0 million ($5.6 million), expanding the Firewall product portfolio [151]. - Cash used for business acquisitions in 2024 was $296,452,000, significantly higher than $106,712,000 in 2023 [247]. Shareholder Returns - The company repurchased 1.3 million shares of common stock for an aggregate cost of $132.9 million at an average price per share of $100.15 during 2024 [132]. - As of December 31, 2024, the company had $340.0 million of authorizations remaining under its share repurchase program [132]. - The company reported a total return to shareholders of 46.1% for the year ended December 31, 2024 [137]. - Common stock dividends paid were $8,204,000 in 2024, slightly down from $8,498,000 in 2023 [249]. Cash Flow and Liquidity - Net cash provided by operating activities totaled $352.1 million for 2024, an increase from $319.6 million in 2023, attributed to improved operating assets and liabilities [185]. - Cash and cash equivalents at the end of 2024 were $370.3 million, with $224.1 million held outside the U.S. [188]. - Cash and cash equivalents decreased to $370.302 million in 2024 from $597.044 million in 2023, a decline of 38.0% [240]. - Total current assets decreased to $1,196.229 million in 2024 from $1,456.979 million in 2023, a decrease of 17.8% [240]. - Long-term debt decreased to $1,130.101 million in 2024 from $1,204.211 million in 2023, a reduction of 6.1% [240]. - The company expects to generate cash from operating activities in 2025, with sufficient liquidity to fund current requirements and capital expenditures [184]. Market and Competitive Environment - Approximately 43% of the company's sales are generated outside the U.S., exposing it to various foreign currency risks [74]. - The company faces significant competition from other manufacturers, which may negatively impact revenues and profitability due to aggressive pricing practices [78]. - Future success depends on the ability to develop and introduce new products that meet changing customer preferences, requiring high levels of innovation [81]. - The company may struggle to achieve revenue growth goals due to challenges in identifying growth opportunities and market conditions [83]. - Revenue forecasting is complicated by global macroeconomic uncertainty, which may lead to slower growth or declines compared to previous periods [84]. Supply Chain and Operational Risks - Supply chain issues, including raw material scarcity, could increase costs or delay order fulfillment, adversely affecting future financial performance [79]. - The company relies on a complex global supply chain, with potential disruptions from tariffs, health crises, or regulatory changes impacting component availability [80]. - The timing of customer project orders can significantly affect revenue recognition, leading to variability in operating results [85]. - Future epidemics or pandemics could disrupt operations and financial performance, as seen in past experiences [103]. - Legal and regulatory changes, including tax laws and trade agreements, may negatively impact financial results and operational costs [106][107]. Inflation and Cost Pressures - Rising inflation and changes in raw material prices, particularly copper, could adversely affect profitability if costs cannot be offset by higher prices [99][100]. - The company has experienced volatility in raw material prices, which could lead to challenges in maintaining competitive pricing and margins [100]. Intellectual Property and Cybersecurity - The company may face challenges in protecting its intellectual property, which could result in financial liabilities or loss of market share [113]. - The company has a Cybersecurity Committee that reports to the Audit Committee, overseeing the enterprise risk management program [121]. - The company has engaged third-party vendors for enterprise-wide attack and penetration tests to assess cybersecurity posture [119]. - The company has developed a program to assess third-party service providers to manage material cybersecurity risks [120]. - The company’s policies ensure that the cybersecurity team is informed of ongoing processes and risks, with regular updates provided to senior management [124]. Labor and Regulatory Challenges - Labor actions related to collective bargaining groups could interrupt business operations, leading to lost revenues and customer dissatisfaction [116]. - Integration challenges from acquisitions could negatively affect operating results and profitability, impacting the achievement of strategic goals [92]. Financial Position and Reserves - The company recorded net foreign currency transaction losses of approximately $0.8 million and $1.8 million for the years 2024 and 2023, respectively [213]. - The company has unconditional copper purchase obligations of 3,499,000 pounds at a weighted average price of $4.30 per pound, totaling $15.029 million [217]. - The company has €450.0 million, €350.0 million, and €300.0 million fixed-rate senior subordinated notes due in 2027, 2028, and 2031, with average interest rates of 3.375%, 3.875%, and 3.375%, respectively [219]. - The company did not have any foreign currency derivatives outstanding as of December 31, 2024 [214]. - The company did not perform a quantitative assessment over any reporting units in 2024 for goodwill impairment testing [204]. - The company is in the process of evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures, which enhances income tax disclosures [200].