What changed in this filing

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Item 1A. Risk Factors

2025-02-13 compared with 2024-02-13 · 62 added, 54 removed, 190 unchanged (38% of the section changed)

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Business and Operational Risks

Volatility in global trade policies and practices could have direct and indirect impacts on our business.

In February 2025, the United States government issued orders increasing tariffs on imports from certain countries, including Canada, China and Mexico on certain products, including steel and aluminum, and has discussed increasing tariffs globally, which is likely to lead to reciprocal tariffs on U.S.

exports to those countries.

Implementation of orders related to Canada and Mexico was initially deferred until March 2025.

Because not all goods can be sourced in all countries, global companies like Belden will experience increased costs in their supply chains that may lead to reduced margins or increased prices.

These increased costs and the uncertainty during transition periods could lead to changes in buying behavior, such as decreased demand.

These impacts could have a negative effect on our financial results, including our revenue and profitability.

Cyber security incidents have and could in the future interfere with our business and operations.

Computer hacking, malware, phishing, and spamming attacks against online networking platforms have become more prevalent.

Though it is difficult to determine what, if any, harm may directly result from any specific attack or interruption, such events could also be expensive to remedy, harm our reputation or brands, and/or lead users to lose trust and confidence in our business.

We, and others on our behalf, also have possession of “personally identifiable information” (“PII”) with respect to employees, vendors, customers, and others.

Based upon a past incident, we have implemented safeguards to protect the privacy of PII as it is possible that hackers or others might obtain this information.

We may be subject to potentially costly remedial actions, fines, penalties, lawsuits, and reputational damage in the event of a future incident.

Furthermore, we rely on our information systems and those of third parties that maintain proprietary company information about our products and intellectual property, as well as for processing customer orders, manufacturing and shipping products, billing our customers, tracking inventory, supporting accounting functions and financial statement preparation, paying our employees, and otherwise running our business.

In addition, we may need to enhance our information systems to provide additional capabilities and functionality.

The implementation of new information systems and enhancements is frequently disruptive to the underlying business of an enterprise.

Any disruptions affecting our ability to accurately report our financial performance on a timely basis could adversely affect our business in a number of respects.

Our results of operations are subject to foreign and domestic political, social, economic, and other uncertainties and are affected by changes in currency exchange rates.

In addition to manufacturing and other operating facilities in the U.S., we have manufacturing and other operating facilities in Canada, China, India, Mexico, Tunisia and several European countries.

We rely on suppliers in many countries, including China.

Our foreign operations are subject to economic, social, and political risks inherent in maintaining operations abroad such as economic and political destabilization, land use risks, international conflicts, pandemics and other health-related crises, restrictive actions by foreign governments, and adverse foreign tax laws.

In addition to economic and political risk, a risk associated with our European manufacturing operations is the higher relative expense and length of time required to adjust manufacturing employment capacity.

We also face political risks in the U.S., including tax or regulatory risks or potential adverse impacts from legislative impasses over, or significant legislative, regulatory or executive changes in fiscal or monetary policy and other foreign and domestic government policies, including, but not limited to, trade policies and import/export policies.

Approximately 43% of our sales are outside the U.S.

Other than the U.S.

dollar, the principal currencies to which we are exposed through our manufacturing operations, sales, and related cash holdings are the euro, the Canadian dollar, the Hong Kong dollar, the Chinese yuan, the Mexican peso, the Australian dollar, the British pound and Indian rupee.

Generally, we have revenues and costs in the same currency, thereby reducing our overall currency risk, although any realignment of our manufacturing capacity among our global facilities could alter this balance.

When the U.S.

dollar strengthens against other currencies, the results of our non-U.S.

operations are translated at a lower exchange rate and thus into lower reported revenues and earnings.

A challenging global economic environment or a downturn in the markets we serve could adversely affect our operating results and stock price in a material manner.

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A decline in energy prices, therefore, can have a negative impact on our revenues and results of operations.

Our results of operations are subject to foreign and domestic political, social, economic, and other uncertainties and are affected by changes in currency exchange rates.

In addition to manufacturing and other operating facilities in the U.S., we have manufacturing and other operating facilities in Canada, China, India, Mexico, Tunisia and several European countries.

We rely on suppliers in many countries, including China.

Approximately 45% of our sales are outside the U.S.

Other than the U.S.

When the U.S.

dollar strengthens against other currencies, the results of our non-U.S.

operations are translated at a lower exchange rate and thus into lower reported revenues and earnings.

The global markets in which we operate are highly competitive.

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Moreover, some competitors that are highly leveraged both financially and operationally could become more aggressive in their pricing of products.

Supply chain issues, including scarcity of raw materials or other components necessary to produce the products we manufacture, could increase costs or cause a delay in our ability to fulfill orders, and could adversely affect our future results of operations and our overall financial performance.

The Company relies on an extended supply chain and the availability of certain raw materials, including but not limited to copper, to produce a significant amount of our products.

A reduction or interruption in supply, an inability to procure quality raw materials in a cost effective manner and constrain volatile materials costs, a failure to monitor contract compliance to ensure and sustain sourcing savings, a failure to procure adequate inventory or raw materials from our suppliers, or regulatory changes may lead to delays in manufacturing and increases in costs.

Many components, including those that are available from multiple sources, are at times subject to industry-wide shortages that could materially adversely affect the Company’s financial condition and operating results.

While the Company has entered into agreements for the supply of many components, there can be no assurance that the Company will be able to extend or renew these agreements on similar terms, or at all.

Component suppliers may suffer from poor financial conditions, which can lead to business failure for the supplier or consolidation within a particular industry, further limiting the Company’s ability to obtain sufficient quantities of components on commercially reasonable terms.

Restrictions on the free movement of goods, like tariffs or sanctions regimes, or health crises, such as a pandemic, could impact the regular availability or cost of important components.

If the Company’s supply of components for a new or existing product were delayed or constrained, or if an outsourcing partner delayed shipments of completed products to the Company, the Company’s financial condition and operating results could be materially adversely affected.

The Company’s business and financial performance could also be materially adversely affected depending on the time required to obtain sufficient quantities from the original source, or to identify and obtain sufficient quantities from an alternative source.

Similarly, if the Company’s customers experience production challenges due to the inability to obtain certain components, this may negatively impact the customers’ ordering patterns from the Company.

Our future success depends in part on our ability to develop and introduce new products and respond to changes in customer preferences.

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We may not be able to acquire businesses that fit our strategic plan on acceptable business terms, and we may not achieve our other strategic priorities.

The Company relies on an extended supply chain and the availability of certain raw materials, including but not limited to copper, to produce a significant amount of our products.

Health crises, such as a pandemic, could lead to quarantines or labor shortages, thus impacting the output of key suppliers.

The presence of substitute products in the marketplace may reduce demand for our products and negatively impact our business.

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These factors, either together or in isolation, may negatively impact revenue and profitability.

Cyber security incidents have and could in the future interfere with our business and operations.

Computer hacking, malware, phishing, and spamming attacks against online networking platforms have become more prevalent.

We, and others on our behalf, also have possession of “personally identifiable information” (“PII”) with respect to employees, vendors, customers, and others.

While we have implemented safeguards to protect the privacy of this information, it is possible that hackers or others might obtain this information in the future, as occurred in 2020.

Based on this occurrence or any future occurrence, in addition to having to take potentially costly remedial action, we may also be subject to fines, penalties, lawsuits, and reputational damage.

In addition, we may need to enhance our information systems to provide additional capabilities and functionality.

The implementation of new information systems and enhancements is frequently disruptive to the underlying business of an enterprise.

Any disruptions affecting our ability to accurately report our financial performance on a timely basis could adversely affect our business in a number of respects.

We may experience significant variability in our quarterly and annual effective tax rate which would affect our reported net income.

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Distributors purchase the products of our competitors along with our products.

Our largest distributor, WESCO, accounted for app roximately 15% of our revenue in 2023 and our top seven distributors, including WESCO, accounted for a total of 31% of o ur reven ue in 2023.

Our largest distributor accounted for app roximately 14% of our revenue in 2024 and our top eight distributors accounted for a total of 33% of o ur reven ue in 2024.

If we were to lose one of these key distributors, our revenue and profits would likely decline, at least temporarily.

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Consolidation of our distributors could adversely impact our revenues and earnings.

It could also result in consolidation of distributor inventory, which would temporarily depress our revenues.

It could also result in consolidation of distributor inventory, which would temporarily decrease our revenues.

We have also experienced financial failure of distributors from time to time, resulting in our inability to collect accounts receivable in full.

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General Industry and Economic Risks

Future epidemics, pandemics or other major disasters could impact our future results of operations and overall financial performance.

In the past, our operations and the operations of our suppliers, channel partners and customers have been disrupted to varying degrees by a pandemic.

The duration and extent of the impact from any future epidemic, pandemic or major disaster depends on future developments that cannot be accurately predicted at this time, such as the extent and effectiveness of containment actions, treatments and vaccinations, the effects of measures enacted by policy makers and central banks around the globe, and the impact of these and other factors on our employees, customers, channel partners and suppliers.

If we are not able to respond to and manage the impact of such events effectively, our business may be affected.

Inflation and changes in the price and availability of raw materials may lead to higher input and labor costs in a way that could be detrimental to our profitability.

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Conversely, if we fail to raise employee wages in a manner sufficient to offset inflation, associates could leave the Company resulting in capacity constraints which could have a negative effect on revenues and earnings.

Extreme weather events and other climate-related catastrophes could impact our locations, our people and our performance.

An increased incidence in catastrophic events, including, but not limited to, hurricanes, tornadoes, flooding, drought and wildfires, increases the probability that our physical locations or communities in which we employ our people will be impacted.

In addition to direct physical damages, such events can lead to supply chain disruptions and increased costs of doing business, including costs to retrofit existing facilities to comply with green building standards and increased property and casualty insurance premiums.

These negative consequences could have a negative impact on our employee safety and our financial performance.

Future epidemics, pandemics or other major disasters could impact our future results of operations and overall financial performance.

In the past, our operations and the operations of our suppliers, channel partners and customers have been disrupted to varying degrees by a pandemic.

If we are not able to respond to and manage the impact of such events effectively, our business may be affected.

Volatility of credit markets and rising interest rates could adversely affect our business.

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Legal and Regulatory Risks

Changes in global tariffs and trade agreements may have a negative impact on global economic conditions, markets and our business.

Like most multinational companies, we have supply chains and sales channels that extend beyond national borders.

Purchasing and production decisions in some cases are largely influenced by the trade agreements and the tax and tariff structures in place.

Disruption in those structures can create significant market uncertainty.

While the impact of the U.S.

and Chinese tariff actions prior to 2025 have not been material to us, unanticipated complications in the free movement of goods in North America or Europe, an escalation of tariff activity anywhere in the world, or changes to existing free trade agreements, especially the United States-Mexico-Canada Agreement (USMCA), could materially impact our financial results.

In addition to the potential direct impacts of free trade restrictions, longer term macroeconomic consequences could result, including slower growth, inflation, higher interest rates and unfavorable impacts to currency exchange rates.

Any of these factors could have a material adverse effect on our business, financial condition and results of operations.

Changes in tax laws may adversely affect our financial position.

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Governmental tax authorities are increasingly scrutinizing the tax positions of companies.

federal and state governments, countries in the European Union, as well as a number of other countries and organizations such as the Organization for Economic Cooperation and Development (OECD), are actively implementing changes to existing tax laws, including a global minimum tax.

Numerous countries have agreed to a statement in support of the OECD model rules that propose a global minimum tax rate of 15% and European Union member states have agreed to implement the global minimum tax.

Various countries have enacted or are expected to enact legislation to be effective as early as 2024, with widespread implementation of a global minimum tax expected by 2025.

As the legislation becomes effective in countries in which we do business, our taxes could increase and negatively impact our provision for income taxes.

We will continue to monitor pending legislation and implementation by individual countries and are in the process of evaluating the potential impact on our business in future periods.

Changes in global tariffs and trade agreements may have a negative impact on global economic conditions, markets and our business.

Like most multinational companies, we have supply chains and sales channels that extend beyond national borders.

Purchasing and production decisions in some cases are largely influenced by the trade agreements and the tax and tariff structures in place.

Disruption in those structures can create significant market uncertainty.

While the impact of Brexit and the U.S.

and Chinese tariff actions have not been material to us, unanticipated complications in the free movement of goods in Europe, an escalation of tariff activity anywhere in the world or changes to existing free trade agreements could materially impact our financial results.

Any of these factors could have a material adverse effect on our business, financial condition and results of operations.

federal and state governments, countries in the European Union, as well as a number of other countries and organizations such as the Organization for Economic Cooperation and Development, are actively implementing changes to existing tax laws, including a global minimum tax.

As changes to tax laws become effective in countries in which we do business, our taxes could increase and negatively impact our provision for income taxes.

We are subject to laws and regulations worldwide, changes to which could increase our costs and individually or in the aggregate adversely affect our business.

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Increasing expectations with respect to Environmental, Social and Governance (ESG) matters by our various stakeholders and ESG regulation could adversely affect our business and operating results.

As a response to growing customer, investor, employee, governmental, and other stakeholder interest in our ESG practices, we have increased reporting of our ESG programs and performance and have established and announced our aspirational goals or targets, including those regarding greenhouse gas emissions and diversity, equity and inclusion.

As a response to growing customer, investor, employee, governmental, and other stakeholder interest in our sustainability practices, we have increased reporting of our sustainability programs and performance and have established and announced our aspirational goals or targets, including those regarding greenhouse gas emissions and other factors.

Our ability to achieve such goals and aspirations is subject to numerous risks and uncertainties, many of which rely on the collective efforts of others or may be outside of our control.

Such risks include, among others, the availability and adoption of new or additional technologies that reduce carbon or eliminate energy sources on a commercially reasonable basis, competing and evolving economic, policy and regulatory factors, the availability of qualified candidates in our labor markets and our ability to recruit and retain diverse talent, and customer engagement in our goals.

There may be times where actual outcomes vary from those aimed for or expected and sometimes challenges may delay or block progress.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors