Belden Inc Net Income jumped on 72.6% and EBITDA Margin increased slightly on 1.4 pp from 16.1% to 17.6%
02/20/2019 • About Belden Inc (
$BDC) • By InTwits
Belden Inc reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is expanding: 17.6% in 2018 vs. 16.1% in 2017 vs. 11.5% in 2014
- Belden Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's in pair with industry average of 3.1%
- CAPEX is quite volatile: $153m in FY2018, $139m in FY2017, $58m in FY2016, $52m in FY2015, $29m in FY2014
- In the last 5 years the company invested considerably less than D&A: $317m vs. $696m. In 2018 this situation was still the same: CAPEX was 98 while D&A was 149
- The company has business model with average profitability: ROIC is 10.5%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.3x while industry average is -0.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 8.2%. Revenue growth showed acceleration in 18Q4 - it increased 8.3% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.9 pp from 18.2% to 22.1% in 2018. EBITDA Margin stuck to a growing trend at 1.6 pp per annum in the last 5 years.
Gross Margin showed almost no change in 2018. During the last 5 years Gross Margin topped in 2016 at 41.6% and was declining since that time. SG&A as a % of Revenue increased slightly on 1.0 pp from 19.3% to 20.3% in 2018. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in 2018.
Net Income margin increased on 2.3 pp from 3.9% to 6.2% in 2018. The efficient tax rate was 27.0% in 2018.
Investments (CAPEX, working capital and M&A)
Belden Inc's CAPEX/Revenue was 3.8% in 2018. CAPEX/Revenue increased slightly on 1.4 pp from 2.4% in 2015 to 3.8% in 2018. Average CAPEX/Revenue for the last three years was 2.9%. CAPEX as a % of Revenue grew at 0.39 pp per annum in the last 5 years.
Accounts receivable as a % of Revenue decreased slightly on 1.8 pp from 19.8% to 18.0% in 2018. Inventories as a % of Revenue showed almost no change at 12.2% in 2018. Accounts payable as a % of Revenue decreased on 3.5 pp from 25.9% to 22.4% in 2018.
Belden Inc has spent
$85m on M&A in 2018 which accounts for 3.3% of revenue.
Return on investment
The company operates at low ROIC (10.5%) and ROE (8.9%). ROIC increased on 2.7 pp from 7.8% to 10.5% in 2018. ROE increased on 4.9 pp from 4.0% to 8.9% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.3x and Debt / EBITDA is 3.2x. Net Debt / EBITDA dropped on 0.3x from 2.6x to 2.3x in 2018. Debt decreased on 6.3% while cash dropped on 25.0%.
The company has no short term refinancing risk: short term debt is zero.
Valuation and dividends
Belden Inc's trades at EV/EBITDA 7.6x and P/E 15.0x.
The company paid 26.7% of Net Income as dividends in 2018. Dividends grew on average at 36.7% per annum in the last 5 years).
Management team
Belden Inc's CEO John S Stroup is a founder and has spent 13 years with the company. CEO total compensation was
$6,335,887 in 2018 which included
$893,750 salary. Hendrikus Derksen "Henk" is a the company's CFO. Hendrikus Derksen "Henk" has spent 7 years at the company.
At the end of financial year the company had 2.1% shares owned by insiders. Insider ownership didn't change in 2018.
The company has 9,000 employees. The number of employees increased on 2.3%. Average revenue per employee in 2018 was
$287,263 and it increased on 5.8%.
Financial and operational results
FY ended 12/31/2018
Belden Inc ($BDC) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 2,308 | 2,309 | 2,357 | 2,389 | 2,585 | 8.2% |
| Gross Profit | 819 | 918 | 981 | 935 | 1,008 | 7.9% |
| SG&A | 488 | 527 | 494 | 461 | 526 | 14.1% |
| EBITDA | 265 | 291 | 369 | 385 | 454 | 17.9% |
| EBIT | 163 | 141 | 224 | 235 | 305 | 29.7% |
| Interest expence | 82 | | | | | |
| Tax | 7 | -27 | -1 | 6 | 60 | 817.9% |
| Net Income | 74 | 66 | 128 | 93 | 161 | 72.6% |
| Stock Based Compensation | 12 | 18 | 18 | 15 | 18 | 26.3% |
Balance Sheet
|
|---|
| Cash | 741 | 217 | 848 | 561 | 421 | -25.0% |
| Accounts Receivable | 380 | 387 | 388 | 474 | 466 | -1.6% |
| Inventory | 228 | 196 | 190 | 297 | 316 | 6.5% |
| Accounts Payable | 272 | 224 | 258 | 376 | 353 | -6.3% |
| Short Term Debt | 3 | 3 | 0 | 0 | 0 | |
| Long Term Debt | 1,765 | 1,725 | 1,620 | 1,561 | 1,463 | -6.3% |
Cash flow
|
|---|
| Capex | 45 | 55 | 54 | 64 | 98 | 52.3% |
| Dividends | 9 | 8 | 16 | 43 | 43 | 0.0% |
| Acquisitions | 348 | 695 | 19 | 167 | 85 | -49.3% |
Ratios
|
|---|
| Revenue growth | 11.6% | 0.0% | 2.1% | 1.4% | 8.2% | |
| EBITDA growth | -10.3% | 9.7% | 27.0% | 4.2% | 17.9% | |
|
|---|
| Gross Margin | 35.5% | 39.8% | 41.6% | 39.1% | 39.0% | -0.1% |
| EBITDA Margin | 11.5% | 12.6% | 15.7% | 16.1% | 17.6% | 1.4% |
| EBIT Margin | 7.1% | 6.1% | 9.5% | 9.9% | 11.8% | 2.0% |
| SG&A, % of revenue | 21.1% | 22.8% | 21.0% | 19.3% | 20.3% | 1.0% |
| SBC, % of revenue | 0.5% | 0.8% | 0.8% | 0.6% | 0.7% | 0.1% |
| Net Income Margin | 3.2% | 2.9% | 5.4% | 3.9% | 6.2% | 2.3% |
| CAPEX, % of revenue | 2.0% | 2.4% | 2.3% | 2.7% | 3.8% | 1.1% |
|
|---|
| ROIC | 6.9% | 5.5% | 7.9% | 7.8% | 10.5% | 2.7% |
| ROE | 9.1% | 8.1% | 9.9% | 4.0% | 8.9% | 4.9% |
| Net Debt/EBITDA | 3.9x | 5.2x | 2.1x | 2.6x | 2.3x | -0.3x |
| Interest coverage ratio (ICR) | 2.0x | | | | |
| Interest expence / Average debt | 4.6% | | | | | |
People
|
|---|
| Insider ownership | 2.1% | 2.1% | 2.1% | 2.1% | 2.1% | 0.0% |
| Employees | 8,100 | 8,200 | 8,400 | 8,800 | 9,000 | 2.3% |
| Revenue/Employee, th. $ | 285 | 282 | 281 | 271 | 287 | 5.8% |
Belden Inc ($BDC) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 606 | 669 | 656 | 655 | | 9.8% | 9.5% | 5.5% | 8.3% |
| EBITDA | 81 | 94 | 169 | 110 | | -6.8% | -7.3% | 69.7% | 13.3% |
| Net Income | 3 | 29 | 86 | 44 | | -89.8% | -19.8% | 8,262.3% | 42.6% |
Balance Sheet
|
|---|
| Cash | 363 | 261 | 329 | 421 | | -55.5% | -61.0% | -28.7% | -25.0% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 1,663 | 1,483 | 1,504 | 1,463 | | 1.3% | -11.7% | -1.7% | -6.3% |
Ratios
|
|---|
| Gross Margin | 38.1% | 38.5% | 39.8% | 39.6% | | -2.3% | -1.3% | 1.2% | 1.6% |
| EBITDA Margin | 13.3% | 14.1% | 25.8% | 16.8% | | -2.4% | -2.5% | 9.8% | 0.7% |
| Net Income Margin | 0.4% | 4.3% | 13.1% | 6.6% | | -4.2% | -1.6% | 12.9% | 1.6% |
Peers in Electronic Components
Below you can find Belden Inc benchmarking vs. other companies in Electronic Components industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Superconductor Technologies Inc. ($SCON) | | -61.4% | -46.3% | 240.5% | 248.9% |
| Akoustis Technologies, Inc. ($AKTS) | | | | | 148.3% |
| CPS Technologies Corp. ($CPSH) | | -5.9% | -29.5% | -5.0% | 48.0% |
| Littelfuse, Inc. ($LFUS) | | 1.9% | 21.7% | 15.7% | 40.7% |
| Cavitation Technologies Inc ($CVAT) | | -73.6% | 267.5% | -40.9% | 22.6% |
| |
|---|
| Median (22 companies) | | -5.9% | 1.1% | 8.3% | 16.6% |
|---|
| Belden Inc ($BDC) | | 0.0% | 2.1% | 1.4% | 8.2% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cavitation Technologies Inc ($CVAT) | 93.5% | 85.0% | 93.2% | 93.5% | 90.6% |
| Dolby Laboratories ($DLB) | 92.7% | 90.2% | 89.4% | 89.1% | 87.9% |
| Flexpoint Sensor Systems Inc ($FLXT) | 96.7% | 95.2% | 92.7% | 87.9% | 86.1% |
| Airgain, Inc. ($AIRG) | 44.6% | 41.9% | 44.4% | 47.1% | 43.7% |
| II-VI Incorporated ($IIVI) | 33.2% | 36.6% | 37.8% | 40.0% | 39.8% |
| |
|---|
| Median (22 companies) | 31.7% | 36.6% | 33.7% | 34.9% | 36.3% |
|---|
| Belden Inc ($BDC) | 35.5% | 39.8% | 41.6% | 39.1% | 39.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Corning Incorporated ($GLW) | 32.2% | 27.5% | 27.9% | 27.3% | 25.4% |
| Dolby Laboratories ($DLB) | 34.1% | 29.1% | 30.9% | 30.8% | 25.1% |
| Amphenol Corporation ($APH) | 22.5% | 22.9% | 22.6% | 23.6% | 24.2% |
| Vishay Intertechnology, Inc. ($VSH) | 14.8% | 11.9% | 15.4% | 18.7% | 21.3% |
| IEH Corp ($IEHC) | 18.4% | 21.2% | 18.0% | 16.3% | 20.2% |
| |
|---|
| Median (22 companies) | 8.6% | 11.9% | 13.6% | 8.7% | 9.3% |
|---|
| Belden Inc ($BDC) | 11.5% | 12.6% | 15.7% | 16.1% | 17.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Akoustis Technologies, Inc. ($AKTS) | | | | 334.0% | 574.7% |
| CBAK Energy Technology, Inc. ($CBAK) | 8.0% | 92.4% | 57.2% | 20.6% | 30.1% |
| Corning Incorporated ($GLW) | 11.1% | 13.7% | 12.0% | 17.8% | 19.9% |
| II-VI Incorporated ($IIVI) | 4.3% | 7.1% | 7.0% | 14.3% | 13.2% |
| Superconductor Technologies Inc. ($SCON) | 586.1% | 57.8% | 0.0% | 34.1% | 12.1% |
| |
|---|
| Median (22 companies) | 4.2% | 3.1% | 3.4% | 5.1% | 4.1% |
|---|
| Belden Inc ($BDC) | 2.0% | 2.4% | 2.3% | 2.7% | 3.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Vishay Intertechnology, Inc. ($VSH) | 8.3% | 4.5% | 9.8% | 18.4% | 27.8% |
| IEH Corp ($IEHC) | 27.7% | 28.2% | 24.2% | 19.2% | 26.1% |
| Amphenol Corporation ($APH) | 19.1% | 18.5% | 18.3% | 19.2% | 21.1% |
| Inrad Optics Inc ($INRD) | -26.7% | -5.2% | -9.2% | -10.4% | 17.7% |
| Littelfuse, Inc. ($LFUS) | 14.3% | 11.1% | 11.7% | 15.8% | 12.1% |
| |
|---|
| Median (22 companies) | 6.8% | 6.1% | 4.7% | 6.0% | 7.8% |
|---|
| Belden Inc ($BDC) | 6.9% | 5.5% | 7.9% | 7.8% | 10.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inrad Optics Inc ($INRD) | | 9.9x | | | 1.4x |
| Corning Incorporated ($GLW) | -0.7x | -0.0x | -0.5x | 0.3x | 1.3x |
| Bel Fuse Inc. ($BELFA) | 4.6x | 2.0x | | 1.4x | 1.3x |
| Amphenol Corporation ($APH) | 1.4x | 0.8x | 1.4x | 1.1x | 1.2x |
| II-VI Incorporated ($IIVI) | 0.7x | 0.0x | 0.1x | 0.5x | 0.9x |
| |
|---|
| Median (14 companies) | -0.6x | -0.3x | -0.5x | -0.3x | 0.5x |
|---|
| Belden Inc ($BDC) | 3.9x | 5.2x | 2.1x | 2.6x | 2.3x |
