BELDEN INC. 10-Q

Item 1. Financial Statements BELDEN INC. CONDENSED CONSOLIDATED BALANCE SHEETS March 30, 2025 December 31, 2024 (Unaudited) (In thousands) ASSETS Current assets: Cash and cash equivalents $ 258,997 $ 370,302 Receivables, net 419,970 409,711 Inventories, net 373,045 343,099 Other current assets 80,509 73,117 Total current assets 1,132,521 1,196,229 Property, plant and equipment, less accumulated depreciation 505,648 495,625 Operating lease right-of-use assets 116,119 118,551 Goodwill 1,018,777 1,018,677 Intangible assets, less accumulated amortization 416,666 419,074 Deferred income taxes 16,289 16,353 Other long-lived assets 64,493 63,429 $ 3,270,513 $ 3,327,938 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 307,057 $ 315,724 Accrued liabilities 281,171 306,980 Total current liabilities 588,228 622,704 Long-term debt 1,178,604 1,130,101 Postretirement benefits 65,247 63,260 Deferred income taxes 77,463 77,333 Long-term operating lease liabilities 97,158 100,049 Other long-term liabilities 41,306 39,755 Stockholders’ equity: Common stock 503 503 Additional paid-in capital 840,565 839,755 Retained earnings 1,225,949 1,176,036 Accumulated other comprehensive loss ( 40,682 ) ( 3,532 ) Treasury stock ( 803,828 ) ( 718,026 ) Total stockholders’ equity 1,222,507 1,294,736 $ 3,270,513 $ 3,327,938 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. -1- BELDEN INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) Three Months Ended March 30, 2025 March 31, 2024 (In thousands, except per share data) Revenues $ 624,861 $ 535,675 Cost of sales ( 379,021 ) ( 334,079 ) Gross profit 245,840 201,596 Selling, general and administrative expenses ( 131,522 ) ( 110,768 ) Research and development expenses ( 28,417 ) ( 26,999 ) Amortization of intangibles ( 13,275 ) ( 10,809 ) Operating income 72,626 53,020 Interest expense, net ( 10,104 ) ( 7,582 ) Non-operating pension benefit (cost) ( 441 ) 231 Income before taxes 62,081 45,669 Income tax expense ( 10,144 ) ( 8,360 ) Net income 51,937 37,309 Less: Net loss attributable to noncontrolling interest — ( 4 ) Net income attributable to Belden stockholders $ 51,937 $ 37,313 Weighted average number of common shares and equivalents: Basic 40,166 40,986 Diluted 40,844 41,491 Basic income per share attributable to Belden stockholders $ 1.29 $ 0.91 Diluted income per share attributable to Belden stockholders $ 1.27 $ 0.90 Comprehensive income attributable to Belden $ 14,787 $ 46,461 Common stock dividends declared per share $ 0.05 $ 0.05 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. -2- BELDEN INC. CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (Unaudited) Three Months Ended March 30, 2025 March 31, 2024 (In thousands) Cash flows from operating activities: Net income $ 51,937 $ 37,309 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 29,784 26,987 Share-based compensation 7,776 6,397 Changes in operating assets and liabilities, net of the effects of currency exchange rate changes, acquired businesses and disposals: Receivables ( 5,934 ) 54,472 Inventories ( 26,676 ) ( 9,657 ) Accounts payable ( 8,612 ) ( 76,904 ) Accrued liabilities ( 40,913 ) ( 45,868 ) Income taxes 6,813 9,470 Other assets ( 3,634 ) ( 1,353 ) Other liabilities ( 3,100 ) 1,868 Net cash provided by operating activities 7,441 2,721 Cash flows from investing activities: Capital expenditures ( 32,202 ) ( 24,250 ) Proceeds from disposal of tangible assets 106 60 Cash from business acquisitions 7,918 — Net cash used for investing activities ( 24,178 ) ( 24,190 ) Cash flows from financing activities: Payments under share repurchase program ( 84,492 ) ( 57,865 ) Withholding tax payments for share-based payment awards ( 13,671 ) ( 7,921 ) Cash dividends paid ( 2,017 ) ( 2,075 ) Payments under financing lease obligations ( 422 ) ( 227 ) Proceeds from issuance of common stock 3,818 3,152 Net cash used for financing activities ( 96,784 ) ( 64,936 ) Effect of foreign currency exchange rate changes on cash and cash equivalents 2,216 ( 3,809 ) Decrease in cash and cash equivalents ( 111,305 ) ( 90,214 ) Cash and cash equivalents, beginning of period 370,302 597,044 Cash and cash equivalents, end of period $ 258,997 $ 506,830 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. -3- BELDEN INC. CONDENSED CONSOLIDATED STOCKHOLDERS’ EQUITY STATEMENTS (Unaudited) Belden Inc. Stockholders Additional Accumulated Other Common Stock Paid-In Retained Treasury Stock Comprehensive Shares Amount Capital Earnings Shares Amount Loss Total (In thousands) Balance at December 31, 2024 50,335 $ 503 $ 839,755 $ 1,176,036 ( 10,124 ) $ ( 718,026 ) $ ( 3,532 ) $ 1,294,736 Net income — — — 51,937 — — — 51,937 Other comprehensive loss, net of tax — — — — — — ( 37,150 ) ( 37,150 ) Common stock issuance — — 2,083 — 48 1,735 — 3,818 Retirement Savings Plan stock contributions — — 1,454 — 20 705 — 2,159 Exercise of stock options, net of tax withholding forfeitures — — ( 445 ) — 6 ( 198 ) — ( 643 ) Conversion of restricted stock units into common stock, net of tax withholding forfeitures — — ( 10,058 ) — 162 ( 2,970 ) — ( 13,028 ) Share repurchase including excise tax — — — — ( 810 ) ( 85,074 ) — ( 85,074 ) Share-based compensation — — 7,776 — — — — 7,776 Common stock dividends ($ 0.05 per share) — — — ( 2,024 ) — — — ( 2,024 ) Balance at March 30, 2025 50,335 $ 503 $ 840,565 $ 1,225,949 ( 10,698 ) $ ( 803,828 ) $ ( 40,682 ) $ 1,222,507 -4- Belden Inc. Stockholders Additional Accumulated Other Non-controlling Common Stock Paid-In Retained Treasury Stock Comprehensive Shares Amount Capital Earnings Shares Amount Income (Loss) Interests Total (In thousands) Balance at December 31, 2023 50,335 $ 503 $ 818,663 $ 985,807 ( 9,208 ) $ ( 597,437 ) $ ( 41,279 ) $ 45 $ 1,166,302 Net income (loss) — — — 37,313 — — — ( 4 ) 37,309 Other comprehensive income, net of tax — — — — — — 9,148 — 9,148 Common stock issuance — — 477 — 48 2,675 — — 3,152 Retirement Savings Plan stock contributions — — 641 — 22 1,187 — — 1,828 Exercise of stock options, net of tax withholding forfeitures — — ( 483 ) — 8 99 — — ( 384 ) Conversion of restricted stock units into common stock, net of tax withholding forfeitures — — ( 10,991 ) — 138 3,454 — — ( 7,537 ) Share repurchase including excise tax — — — — ( 675 ) ( 58,270 ) — — ( 58,270 ) Share-based compensation — — 6,397 — — — — — 6,397 Common stock dividends ($ 0.05 per share) — — — ( 2,059 ) — — — — ( 2,059 ) Balance at March 31, 2024 50,335 $ 503 $ 814,704 $ 1,021,061 ( 9,667 ) $ ( 648,292 ) $ ( 32,131 ) $ 41 $ 1,155,886 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. -5- BELDEN INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1: Summary of Significant Accounting Policies Basis of Presentation The accompanying Condensed Consolidated Financial Statements include Belden Inc. and all of its subsidiaries (the Company, us, we, or our). We eliminate all significant affiliate accounts and transactions in consolidation. The accompanying Condensed Consolidated Financial Statements presented as of any date other than December 31, 2024: • Are prepared from the books and records without audit, and • Are prepared in accordance with the instructions for Form 10-Q and do not include all of the information required by accounting principles generally accepted in the United States for complete statements, but • Include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial statements. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Supplementary Data contained in our 2024 Annual Report on Form 10-K. Business Description Belden Inc. (the Company, us, we, or our) is a leading global supplier of complete connection solutions built around two global businesses - Smart Infrastructure Solutions and Automation Solutions. We sell our products to distributors, end-users, installers, and directly to OEMs. We have manufacturing and other operating facilities in the U.S., Canada, China, India, Mexico, Tunisia, and various countries in Europe. Reporting Periods Our fiscal year and fiscal fourth quarter both end on December 31. Our fiscal first quarter ends on the Sunday falling closest to 91 days after December 31, which was March 30, 2025, the 89th day of our fiscal year 2025. Our fiscal second and third quarters each have 91 days. The three months ended March 31, 2024 included 91 days. Fair Value Measurement Accounting guidance for fair value measurements specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources or reflect our own assumptions of market participant valuation. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: • Level 1 – Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities; • Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets, or financial instruments for which significant inputs are observable, either directly or indirectly; and • Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. As of and during the three months ended March 30, 2025 and March 31, 2024, we utilized Level 1 inputs to determine the fair value of cash equivalents. We did not have any transfers between Level 1 and Level 2 fair value measurements during the three months ended March 30, 2025 and March 31, 2024. Cash and Cash Equivalents We classify cash on hand and deposits in banks, including commercial paper, money market accounts, and other investments with an original maturity of three months or less, that we hold from time to time, as cash and cash equivalents. We periodically have cash equivalents consisting of short-term money market funds and other investments. As of March 30, 2025, we did not have any such cash equivalents on hand. The primary objective of our investment activities is to preserve our capital for the purpose of funding operations. We do not enter into investments for trading or speculative purposes. -6- Contingent Liabilities We have established liabilities for environmental and legal contingencies that are probable of occurrence and reasonably estimable, the amounts of which are currently not material. We accrue environmental remediation costs based on estimates of known environmental remediation exposures developed in consultation with our environmental consultants and legal counsel. We are, from time to time, subject to routine litigation incidental to our business. Historically, these lawsuits have primarily involved claims for damages arising out of the use of our products, allegations of patent or trademark infringement, and litigation and administrative proceedings involving employment matters and commercial disputes. Based on facts currently available, we believe the disposition of the claims that are pending or asserted will not have a material adverse effect on our financial position, results of operations, or cash flow. As of March 30, 2025, we were party to surety bonds, standby letters of credit, and bank guaranties totaling $ 12.5 million, $ 9.4 million, and $ 4.9 million, respectively. Revenue Recognition We recognize revenue consistent with the principles as outlined in the following five step model: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) each performance obligation is satisfied. See Note 2. Subsequent Events We evaluated subsequent events after the balance sheet date through the financial statement issuance date for appropriate accounting and disclosure. See Note 16. Current Year Adoption of Accounting Pronouncements None of the accounting pronouncements that became effective during 2025 had a material impact to our condensed consolidated financial statements or disclosures. Pending Adoption of Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures (ASU 2023-09) enhancing the transparency and decision usefulness of income tax disclosures. ASU 2023-09 addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments in ASU 2023-09 are applied on a prospective basis, though retrospective application is permitted. We did not early adopt this pronouncement and are in the process of evaluating its impact on our consolidated financial statements and related disclosures. In March 2024, the SEC issued a final climate disclosure rule, which requires registrants to disclose climate-related information in registration statements and annual reports. The final rule also requires certain disclosures related to risk management and governance over climate-related risks, material climate targets and goals, and material Scope 1 and Scope 2 greenhouse gas emissions. For calendar year companies, the ruling requires certain disclosures in annual reports for the year ending December 31, 2025. On April 4, 2024, the SEC voluntarily stayed the final rule pending the completion of judicial review of cases pending in the Eighth Circuit. We are continuing to evaluate the impact of the final rule on our consolidated financial statements and disclosures. In November 2024, the FASB issued guidance to improve the disclosure of expenses in commonly presented expense captions. The new guidance requires a public entity to provide tabular disclosure, on an annual and interim basis, of amounts for the following expense categories: (1) purchases of inventory, (2) employee compensation, (3) depreciation and (4) intangible asset amortization, as included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement that contains any of the expense categories noted. Additionally, on an annual and interim basis, a qualitative description is required for amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. The guidance also requires certain amounts that are currently required to be disclosed to be included in the same tabular disclosure as these disaggregation requirements. Furthermore, on an annual and interim basis, a public entity is required to separately disclose selling expenses and annually, disclose a description of the selling expenses. The guidance is effective for 2027 annual reporting, and in the first quarter of 2028 for interim reporting, with early adoption permitted, to be applied on a prospective basis, with retrospective application permitted. We will adopt the guidance when it becomes effective, in our 2027 annual reporting and each quarter thereafter, on a prospective basis. -7- Note 2: Revenues Revenues are recognized when control of the promised goods or services is transferred to our customers and in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Taxes collected from customers and remitted to governmental authorities are not included in our revenues. The following tables present our revenues disaggregated by major product category. Broadband Solutions Automation Solutions Smart Buildings Solutions Total Revenues Three Months Ended March 30, 2025 (In thousands) Smart Infrastructure Solutions $ 146,647 $ — $ 127,403 $ 274,050 Automation Solutions — 350,811 — 350,811 Total $ 146,647 $ 350,811 $ 127,403 $ 624,861 Three Months Ended March 31, 2024 Smart Infrastructure Solutions $ 112,100 $ — $ 121,989 $ 234,089 Automation Solutions — 301,586 — 301,586 Total $ 112,100 $ 301,586 $ 121,989 $ 535,675 The following tables present our revenues disaggregated by geography, based on the location of the customer purchasing the product. Americas EMEA APAC Total Revenues Three Months Ended March 30, 2025 (In thousands) Smart Infrastructure Solutions $ 219,453 $ 39,304 $ 15,293 $ 274,050 Automation Solutions 208,778 85,798 56,235 350,811 Total $ 428,231 $ 125,102 $ 71,528 $ 624,861 Three Months Ended March 31, 2024 Smart Infrastructure Solutions $ 166,329 $ 45,688 $ 22,072 $ 234,089 Automation Solutions 182,890 77,856 40,840 301,586 Total $ 349,219 $ 123,544 $ 62,912 $ 535,675 We generate revenues primarily by selling products and delivering solutions that make the digital journey simpler, smarter, and secure. We also generate revenues from providing support and professional services. We sell our products to distributors, end-users, installers, and directly to original equipment manufacturers. At times, we enter into arrangements that involve the delivery of multiple performance obligations. For these arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price and recognized when or as each performance obligation is satisfied. Generally, we determine relative standalone selling price using the prices charged separately to customers on a standalone basis. Typically, payments are due after control transfers. Most of our performance obligations related to the sale of products are satisfied at a point in time when control of the product is transferred to the customer, which generally occurs when the product has been shipped or delivered from our facility to our customers, the customer has legal title to the product, and we have a present right to payment for the product. We also consider any customer acceptance clauses in determining when control has transferred to the customer and typically, these clauses are not substantive. The amount of consideration we receive and revenue we recognize varies due to rebates, returns, and price adjustments. We estimate the expected rebates, returns, and price adjustments based on an analysis of historical experience, anticipated sales demand, and trends in product pricing. For example, our estimate of price adjustments is based on our historical price adjustments as a percentage of revenues and the average time period between the original sale and the issuance of the price adjustment. We adjust our estimate of revenue for variable consideration at the earlier of when the most likely amount of consideration we expect to receive changes or when the consideration becomes fixed. We adjust other current assets and cost of sales for the estimated level of returns. Adjustments to revenue for performance obligations satisfied in prior periods were not significant during the three months ended March 30, 2025 and March 31, 2024 . The following table presents estimated and accrued variable consideration: -8- March 30, 2025 December 31, 2024 (in thousands) Accrued rebates included in accrued liabilities $ 38,073 $ 51,063 Accrued returns included in accrued liabilities 15,238 15,950 Price adjustments recognized against gross accounts receivable 30,020 29,100 Depending on the terms of an arrangement, we may defer the recognition of a portion of the consideration received because we have to satisfy a future performance obligation. Consideration allocated to support services under a support and maintenance contract is typically paid in advance and recognized ratably over the term of the service. Consideration allocated to professional services is recognized wh en or as the services are performed depending on the terms of the arrangement. Our contract terms for support, maintenance, and professional services typically require payment within one year or less of when the services will be provided. As of March 30, 2025, total deferred revenue was $ 43.4 million, and of this amount, $ 32.5 million is expected to be recognized within the next twelve months, and the remaining $ 10.9 million is long- term and is expected to be recognized over a period greater than twelve months. The following table presents deferred revenue activity during the three months ended March 30, 2025 and March 31, 2024, respectively: 2025 2024 (In thousands) Beginning balance at January 1 $ 40,128 $ 31,062 New deferrals 13,735 6,280 Revenue recognized ( 10,420 ) ( 7,392 ) Balance at the end of Q1 $ 43,443 $ 29,950 Service-type warra nties represent $ 14.6 million of the deferred revenue balance at March 30, 2025, and of this amount $ 6.1 million is expected to be recognized in the next twelve months, and the remaining $ 8.5 million is long-term and will be recognized over a period greater than twelve months. As of March 30, 2025 and December 31, 2024, we did not have any material contract assets recorded in the Condensed Consolidated Balance Sheets. We expense sales commissions as incurred when the duration of the related revenue arrangement is one year or less. We capitalize sales commissions when the original duration of the related revenue arrangement is longer than one year, and we amortize it over the related revenue arrangement period. Capitalized sales commissions as of March 30, 2025 and December 31, 2024 were not material. The following table presents sales commissions that are recorded within selling, general and administrative expenses: Three Months Ended March 30, 2025 March 31, 2024 (In thousands) Sales commissions $ 5,986 $ 5,323 Note 3: Acquisitions On June 30, 2024, we acquired Precision and accounted for it as a business combination. During the three months ended March 30, 2025, we received $ 7.9 million related to an adjustment of the consideration paid . Including this adjustment, the total consideration paid for Precision, net of cash acquired, was $ 281.7 million and was funded with cash on hand. Precision, based in New York, is a leading supplier of value-added optical transceivers with proprietary software, firmware configurations, and related components. Precision is reported within the Smart Infrastructure Solutions segment. The following table summarizes the estimated, preliminary fair values of the assets acquired and liabilities assumed for Precision as of the acquisition date (in thousands): -9- Receivables $ 24,191 Inventory 7,098 Other current assets 1,486 Property, plant and equipment 5,330 Intangible assets 194,100 Goodwill 114,097 Operating lease right-of-use assets 2,731 Total assets acquired $ 349,033 Accounts payable $ 11,662 Accrued liabilities 10,143 Deferred income taxes 42,825 Long-term operating lease liabilities 2,468 Other long-term liabilities 222 Total liabilities assumed $ 67,320 Net assets $ 281,713 The above purchase price allocation is preliminary and subject to revision as additional information about the fair value of individual assets and liabilities becomes available. The preliminary measurement of receivables, inventory, intangible assets, goodwill, deferred income taxes, and other assets and liabilities are subject to change. A change in the estimated fair value of the net assets acquired will change the amount of the purchase price allocated to goodwill. The preliminary fair value of acquired receivables is $ 24.2 million , which is equivalent to its gross contractual amount. A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. If actual results are materially different than the assumptions we used to determine fair value of the assets and liabilities acquired, it is possible that adjustments to the carrying values of such assets and liabilities will have an impact on our net earnings. In particular, the valuation of the customer relationships intangible asset was complex and required significant judgment. We used the multi-period excess earnings method under the income approach to measure the customer relationships intangible asset. The key assumptions utilized in the valuation include discount rates, revenue growth rates, and profitability levels of forecasted results. These assumptions are forward-looking and could be affected by future economic and market conditions. For purposes of the above allocation, we based our preliminary estimate of the fair values for intangible assets on valuation studies performed by a third party valuation firm. We used various valuation methods including lost income, excess earnings, and relief from royalty to estimate the preliminary fair value of the identifiable intangible assets (Level 3 valuation). Goodwill and other intangible assets reflected above were determined to meet the criteria for recognition apart from tangible assets acquired and liabilities assumed. The goodwill is primarily attributable to the expansion of Belden’s solution selling capabilities, particularly the ability to offer more complete fiber infrastructure solutions. Our tax basis in the acquired goodwill is zero . The intangible assets related to the acquisition consisted of the following: Fair Value Amortization Period (In thousands) (In years) Intangible assets subject to amortization: Developed technologies $ 24,700 5.0 Customer relationships 161,900 20.0 Trademarks 3,000 2.5 Non-compete agreements 4,500 5.0 Total intangible assets subject to amortization $ 194,100 Intangible assets not subject to amortization: Goodwill $ 114,097 n/a Total intangible assets not subject to amortization $ 114,097 Total intangible assets $ 308,197 Weighted average amortization period 17.5 -10- The amortizable intangible assets reflected in the table above were determined by us to have finite lives. The useful life for the developed technology intangible asset was based on the estimated time that the technology provides us with a competitive advantage and thus approximates the period and pattern of consumption of the intangible asset. The useful life for the customer relationship intangible asset was based on our forecasts of estimated sales from recurring customers. The useful life for the trademarks was based on the period of time we expect to continue to go to market using the trademarks. The following table illustrates the unaudited pro forma effect on operating results as if the Precision acquisition had been completed as of January 1, 2023. Three Months Ended March 31, 2024 (In thousands, except per share data) (Unaudited) Revenues $ 574,714 Net income attributable to Belden stockholders 35,393 Diluted income per share attributable to Belden stockholders $ 0.85 The above unaudited pro forma financial information is presented for informational purposes only and does not purport to represent what our results of operations would have been had we completed the acquisition on the date assumed, nor is it necessarily indicative of the results that may be expected in future periods. Pro forma adjustments exclude cost savings from any synergies resulting from the acquisition. Note 4: Reportable Segments We are organized around two global businesses: Smart Infrastructure Solutions and Automation Solutions. Each of the global businesses represents a reportable segment. Our chief operating decision maker is our President and Chief Executive Officer. The key measure of segment profit or loss used by him to review segment operating results is Segment EBITDA. Segment EBITDA excludes certain items, including depreciation expense; amortization of intangibles; asset impairment; severance, restructuring, and acquisition integration costs; adjustments related to acquisitions and divestitures; and other costs. We allocate corporate expenses to the segments for purposes of measuring Segment EBITDA. Corporate expenses are allocated on the basis of each segment’s relative EBITDA prior to the allocation. Segment revenues represent non-affiliate revenues. Our measure of segment assets does not include cash, goodwill, intangible assets, deferred tax assets, or corporate assets. All goodwill is allocated to reporting units of our segments for purposes of impairment testing. Operating Segment Information For the Three Months Ended March 30, 2025 March 31, 2024 (In thousands) Smart Infrastructure Solutions Segment Revenues $ 274,050 $ 234,089 Affiliate Revenues 30 39 Segment Cost of Sales ( 182,008 ) ( 163,425 ) Segment Selling, General and Administrative Expenses ( 50,392 ) ( 37,074 ) Segment Research and Development Expenses ( 10,545 ) ( 7,841 ) Segment EBITDA $ 31,135 $ 25,788 Segment assets 650,925 $ 610,106 Items excluded from segment measures: Depreciation expense $ 6,572 $ 6,305 Amortization of intangibles 8,656 5,719 Amortization of software development intangible assets 18 — Severance, restructuring, and acquisition integration costs 957 1,590 -11- For the Three Months Ended March 30, 2025 March 31, 2024 (In thousands) Automation Solutions Segment Revenues $ 350,811 $ 301,586 Affiliate Revenues 328 399 Segment Cost of Sales ( 185,951 ) ( 159,078 ) Segment Selling, General and Administrative Expenses ( 74,124 ) ( 66,417 ) Segment Research and Development Expenses ( 17,739 ) ( 17,745 ) Segment EBITDA $ 73,325 $ 58,745 Segment assets $ 828,594 $ 754,732 Items excluded from segment measures: Depreciation expense $ 7,324 $ 7,160 Amortization of intangibles 4,619 5,090 Amortization of software development intangible assets 2,595 2,713 Severance, restructuring, and acquisition integration costs 741 2,622 Adjustments related to acquisitions and divestitures 298 298 For the Three Months Ended March 30, 2025 March 31, 2024 (In thousands) Total Segments Segment Revenues $ 624,861 $ 535,675 Affiliate Revenues 358 438 Segment Cost of Sales ( 367,959 ) ( 322,503 ) Segment Selling, General and Administrative Expenses ( 124,516 ) ( 103,491 ) Segment Research and Development Expenses ( 28,284 ) ( 25,586 ) Segment EBITDA $ 104,460 $ 84,533 Segment assets $ 1,479,519 $ 1,364,838 Items excluded from segment measures: Depreciation expense $ 13,896 $ 13,465 Amortization of intangibles 13,275 10,809 Amortization of software development intangible assets 2,613 2,713 Severance, restructuring, and acquisition integration costs 1,698 4,212 Adjustments related to acquisitions and divestitures 298 298 -12- The following table is a reconciliation of the total of the reportable segments’ Revenues and EBITDA to consolidated revenues and consolidated income before taxes, respectively. Three Months Ended March 30, 2025 March 31, 2024 (In thousands) Total Segment and Consolidated Revenues $ 624,861 $ 535,675 Total Segment EBITDA $ 104,460 $ 84,533 Depreciation expense ( 13,896 ) ( 13,465 ) Amortization of intangibles ( 13,275 ) ( 10,809 ) Severance, restructuring, and acquisition integration costs (1) ( 1,698 ) ( 4,212 ) Amortization of software development intangible assets ( 2,613 ) ( 2,713 ) Adjustments related to acquisitions and divestitures (2) ( 298 ) ( 298 ) Eliminations ( 54 ) ( 16 ) Consolidated operating income 72,626 53,020 Interest expense, net ( 10,104 ) ( 7,582 ) Total non-operating pension benefit (cost) ( 441 ) 231 Consolidated income before taxes $ 62,081 $ 45,669 (1) Includes costs associated with acquisitions and manufacturing footprint actions. (2) Adjustments related to acquisitions and divestitures include fair value adjustments of acquired assets. Note 5: Income per Share The following table presents the basis for the income per share computations: Three Months Ended March 30, 2025 March 31, 2024 (In thousands) Numerator: Net income $ 51,937 $ 37,309 Less: Net loss attributable to noncontrolling interest — ( 4 ) Net income attributable to Belden stockholders $ 51,937 $ 37,313 Denominator: Weighted average shares outstanding, basic 40,166 40,986 Effect of dilutive common stock equivalents 678 505 Weighted average shares outstanding, diluted 40,844 41,491 For the three months ended March 30, 2025, there was an immaterial amount of anti-dilutive shares excluded from diluted weighted average shares outstanding. For the three months ended March 31, 2024, diluted weighted average shares outstanding did not include outstanding equity awards of 0.1 million because they were anti-dilutive. In addition, for both the three months ended March 30, 2025 and March 31, 2024 , diluted weighted average shares outstanding do not include outstanding equity awards of 0.3 million because the related performance conditions have not been satisfied. For purposes of calculating basic earnings per share, unvested restricted stock units are not included in the calculation of basic weighted average shares outstanding until all necessary conditions have been satisfied and issuance of the shares underlying the restricted stock units is no longer contingent. Necessary conditions are not satisfied until the vesting date, at which time holders of our restricted stock units receive shares of our common stock. For purposes of calculating diluted earnings per share, unvested restricted stock units are included to the extent that they are dilutive. In determining whether unvested restricted stock units are dilutive, each issuance of restricted stock units is considered separately. Once a restricted stock unit has vested, it is included in the calculation of both basic and diluted weighted average shares outstanding. -13- Note 6: Credit Losses We are exposed to credit losses primarily through sales of products and services. Our expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade accounts receivables. Due to the short-term nature of such receivables, the estimated amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances and the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. Our monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible. Provisions and recoveries are included in selling, general and administrative expenses. The following table presents the activity in the trade receivables allowance for doubtful accounts for the three months ended March 30, 2025 and March 31, 2024, respectively: 2025 2024 (In thousands) Beginning balance at January 1 $ 25,257 $ 23,114 Current period provision 72 459 Recoveries collected ( 146 ) ( 6 ) Write-offs ( 674 ) ( 96 ) Fx impact 143 ( 51 ) Q1 ending balance $ 24,652 $ 23,420 Note 7: Inventories The following table presents the major classes of inventories as of March 30, 2025 and December 31, 2024 , respectively: March 30, 2025 December 31, 2024 (In thousands) Raw materials $ 203,224 $ 187,530 Work-in-process 50,170 40,442 Finished goods 198,480 186,237 Gross inventories 451,874 414,209 Excess and obsolete reserves ( 78,829 ) ( 71,110 ) Net inventories $ 373,045 $ 343,099 Note 8: Leases We have operating and finance leases for properties, including manufacturing facilities, warehouses, and office space; as well as vehicles and equipment. We make certain judgments in determining whether a contract contains a lease in accordance with ASU 2016-02. Our leases have remaining lease terms within 1 to 20 years; some of which include extension and termination options. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably certain as of the commencement date of the lease. We have a few short-term operating leases with terms less than twelve months - these leases are not recorded on our balance sheet and the overall rent expense is not material. We also have certain lease contracts that contain both lease and non-lease components. We have elected the practical expedient to account for these components together as a single, combined lease component. T he rate implicit in most of our leases is not readily determinable. As a result, we utilize the incremental borrowing rate to determine the present value of the lease payments, which is unique to each leased asset, and is based upon the term of the lease, commencement date of the lease, local currency of the leased asset, and the credit rating of the legal entity leasing the asset. Our lease agreements do not contain material residual value guarantees. Our variable lease expense was approximately $ 0.8 million and $ 0.9 million for the three months ended March 30, 2025 and March 31, 2024, respectively. -14- The components of lease expense were as follows: Three Months Ended March 30, 2025 March 31, 2024 (In thousands) Operating lease cost $ 6,882 $ 6,875 Finance lease cost Amortization of right-of-use asset $ 467 $ 194 Interest on lease liabilities 13 109 Total finance lease cost $ 480 $ 303 Supplemental cash flow information related to leases was as follows: Three Months Ended March 30, 2025 March 31, 2024 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,030 $ 6,727 Operating cash flows from finance leases were not material during the three months ended March 30, 2025 and March 31, 2024 . Supplemental balance sheet information related to leases was as follows: March 30, 2025 December 31, 2024 (In thousands) Operating leases: Total operating lease right-of-use assets $ 116,119 $ 118,551 Accrued liabilities $ 20,155 $ 19,437 Long-term operating lease liabilities 97,158 100,049 Total operating lease liabilities $ 117,313 $ 119,486 Finance leases: Other long-lived assets, at cost $ 12,975 $ 12,257 Accumulated depreciation ( 2,795 ) ( 2,322 ) Other long-lived assets, net $ 10,180 $ 9,935 Accrued liabilities $ 1,810 $ 1,648 Other long-term liabilities 8,841 8,845 Total finance lease liabilities $ 10,651 $ 10,493 March 30, 2025 December 31, 2024 Weighted Average Remaining Lease Term Operating leases 10 years 10 years Finance leases 6 years 6 years Weighted Average Discount Rate Operating leases 6.2 % 6.2 % Finance leases 4.9 % 4.8 % -15- In addition, we guaranteed the lease payments for certain property leases of a former subsidiary with expiration dates extending up to 2035. These lease guarantees were retained by Belden and not transferred to the buyer of the former subsidiary. As of March 30, 2025 and December 31, 2024, the fixed, remaining base rent payments were approximately $ 19 million and $ 20 million, respectively. As of March 30, 2025 and December 31, 2024, we had a liability for expected, future payments of $ 12.0 million and $ 12.3 million, respectively. The liability is based on certain assumptions that we continually reassess on an ongoing basis. We will update the estimated liability balance for changes in assumptions as needed. Note 9: Long-Lived Assets Depreciation and Amortization Expense We recognized depreciation and amortization expense of $ 13.9 million and $ 15.9 million in the three months ended March 30, 2025, respectively. We recognized depreciation and amortization expense of $ 13.5 million and $ 13.5 million in the three months ended March 31, 2024, respectively. Note 10: Long-Term Debt and Other Borrowing Arrangements The carrying values of our long-term debt were as follows: March 30, 2025 December 31, 2024 (In thousands) Revolving credit agreement due 2026 $ — $ — Senior subordinated notes: 3.375 % Senior subordinated notes due 2027 485,415 465,795 3.875 % Senior subordinated notes due 2028 377,545 362,285 3.375 % Senior subordinated notes due 2031 323,610 310,530 Total senior subordinated notes 1,186,570 1,138,610 Less unamortized debt issuance costs ( 7,966 ) ( 8,509 ) Long-term debt $ 1,178,604 $ 1,130,101 Revolving Credit Agreement due 2026 We have a $ 300.0 million multi-currency asset-based revolving credit facility (the Revolver). The maturity date of the Revolver is June 2, 2026. The borrowing base under the Revolver includes eligible accounts receivable; inventory; and property, plant and equipment of certain of our subsidiaries in the United States, Canada, Germany, the United Kingdom and the Netherlands. Interest on outstanding borrowings is variable, based upon SOFR or other similar indices in foreign jurisdictions, plus a spread that ranges from 1.25 %- 1.75 %, depending upon our leverage position. Outstanding borrowings in the U.S. and Canada may also, at our election, be priced on a base rate plus a spread that ranges from 0.25 % — 0.75 %, depending on our leverage position. We pay a commitment fee on the total commitments of 0.25 %. In the event that we borrow more than 90 % of our combined borrowing base or our borrowing base availability is less than $ 20.0 million, we are subject to a fixed charge coverage ratio covenant. As of March 30, 2025, we had no borrowings outstanding on the Revolver, and our available borrowing capacity was $ 291.0 million. During fiscal April 2025, we borrowed $ 50.0 million and subsequently repaid $ 20.0 million on our Revolver at a current rate of 5.7 %. See Note 16. Senior Subordinated Notes We have outstanding € 450.0 million aggregate principal amount of 3.375 % senior subordinated notes due 2027 (the 2027 Notes). The carrying value of the 2027 Notes as of March 30, 2025 is $ 485.4 million. The 2027 Notes are guaranteed on a senior subordinated basis by our current and future domestic subsidiaries. The 2027 Notes rank equal in right of payment with our senior subordinated notes due 2031 and 2028 and with any future subordinated debt, and they are subordinated to all of our senior debt and the senior debt of our subsidiary guarantors, including our Revolver. Interest is payable semiannually on January 15 and July 15 of each year. -16- We have outstanding € 350.0 million aggregate principal amount of 3.875 % senior subordinated notes due 2028 (the 2028 Notes). The carrying value of the 2028 Notes as of March 30, 2025 is $ 377.5 million. The 2028 Notes are guaranteed on a senior subordinated basis by our current and future domestic subsidiaries. The 2028 Notes rank equal in right of payment with our senior subordinated notes due 2031 and 2027 and with any future subordinated debt, and they are subordinated to all of our senior debt and the senior debt of our subsidiary guarantors, including our Revolver. Interest is payable semiannually on March 15 and September 15 of each year. We have outstanding € 300.0 million aggregate principal amount of 3.375 % senior subordinated notes due 2031 (the 2031 Notes). The carrying value of the 2031 Notes as of March 30, 2025 is $ 323.6 million. The 2031 Notes are guaranteed on a senior subordinated basis by our current and future domestic subsidiaries. The 2031 Notes rank equal in right of payment with our senior subordinated notes due 2028 and 2027 and with any future subordinated debt, and they are subordinated to all of our senior debt and the senior debt of our subsidiary guarantor s, including our Revolver. Interest is payable semiannually on January 15 and July 15 of each year. Fair Value of Long-Term Debt The fair value of our senior subordinated notes as of March 30, 2025 was approximately $ 1,164.2 million based on quoted prices of the debt instruments in inactive markets (Level 2 valuation). This amount represents the fair value of our senior subordinated notes with a carrying value of $ 1,186.6 million as of March 30, 2025. Note 11: Net Investment Hedge All of our euro denominated notes were issued by Belden Inc., a USD functional currency entity. As of March 30, 2025, € 567.8 million o f our outstanding foreign denominated debt is designated as a net investment hedge on the foreign currency risk of our net investment in our euro foreign operations. The objective of the hedge is to protect the net investment in the foreign operation against adverse changes in the euro exchange rate. The transaction gain or loss is reported in the translation adjustment section of other comprehensive income. For the three months ended March 30, 2025 and March 31, 2024, the transaction gain (loss) associated with the net investment hedge reported in other comprehensive income was $( 24.9 ) million and $ 12.7 million, respectively. Note 12: Income Taxes For the three months ended March 30, 2025, we recognized income tax expense of $ 10.1 million, representing an effective tax rate of 16.3 %. For the three months ended March 31, 2024 , we recognized income tax expense of $ 8.4 million, representing an effective tax rate of 18.3 %. The effective tax rates were primarily impacted by the effect of our foreign operations, including statutory tax rate differences and foreign tax credits. The Organization for Economic Cooperation and Development is actively implementing changes to existing tax laws, including a global minimum tax of 15% which went into effect in 2024. This legislation has not materially impacted our provision for income taxes, but we will continually monitor and evaluate the potential impact on the countries in which we do business in future periods. Note 13: Pension and Other Postretirement Obligations The following table provides the components of net periodic benefit costs for our pension and other postretirement benefit plans: Pension Obligations Other Postretirement Obligations March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024 (In thousands) Three Months Ended Service cost $ 762 $ 748 $ 7 $ 10 Interest cost 3,768 3,676 223 238 Expected return on plan assets ( 3,824 ) ( 4,047 ) — — Amortization of prior service cost 37 45 — — Actuarial losses (gains) 319 ( 26 ) ( 82 ) ( 117 ) Net periodic benefit cost $ 1,062 $ 396 $ 148 $ 131 -17- Note 14: Comprehensive Income and Accumulated Other Comprehensive Income (Loss) The following table summarizes total comprehensive income: Three Months Ended March 30, 2025 March 31, 2024 (In thousands) Net income $ 51,937 $ 37,309 Foreign currency translation adjustments, net of tax ( 37,360 ) 9,222 Adjustments to pension and postretirement liability, net of tax 210 ( 74 ) Total comprehensive income 14,787 46,457 Less: Comprehensive loss attributable to noncontrolling interests — ( 4 ) Comprehensive income attributable to Belden $ 14,787 $ 46,461 The tax impacts of the foreign currency translation adjustments and pension liability adjustments in the table above are not material. The accumulated balances related to each component of other comprehensive loss, net of tax, are as follows: Foreign Currency Translation Component Pension and Other Postretirement Benefit Plans Accumulated Other Comprehensive Loss (In thousands) Balance at December 31, 2024 $ 3,129 $ ( 6,661 ) $ ( 3,532 ) Other comprehensive loss attributable to Belden before reclassifications ( 37,360 ) — ( 37,360 ) Amounts reclassified from accumulated other comprehensive loss — 210 210 Net current period other comprehensive loss attributable to Belden ( 37,360 ) 210 ( 37,150 ) Balance at March 30, 2025 $ ( 34,231 ) $ ( 6,451 ) $ ( 40,682 ) The following table summarizes the effects of reclassifications from accumulated other comprehensive loss for the three months ended March 30, 2025: Amounts Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Consolidated Statements of Operations and Comprehensive Income (In thousands) Amortization of pension and other postretirement benefit plan items: Actuarial losses $ 237 (1) Prior service cost 37 (1) Total before tax 274 Tax benefit ( 64 ) Total net of tax $ 210 (1) The amortization of these accumulated other comprehensive loss components are included in the computation of net periodic benefit costs (see Note 13). Note 15: Share Repurchase We have a share repurchase program which allows us to purchase our common stock through open market repurchases, negotiated transactions, or other means, in accordance with applicable securities laws and other restrictions. This program is funded with cash on hand and cash flows from operating activities. During the three months ended March 30, 2025, we repurchased 0.8 million shares of our common stock for an aggregate cost of $ 84.5 million at an average price per share of $ 104.28 . In fiscal April 2025, we repurchased 0.2 million shares of our common stock for an aggregate cost of $ 15.5 million. As of the date of this filing, we had $ 240.0 million of authorizations remaining under the program. This share repurchase authorization does not have an expiration date. During the three months ended March 31, 2024, we repurchased 0.7 million shares of our common stock for an aggregate cost of $ 57.9 million at an average price per share of $ 85.66 . -18- Note 16: Subsequent Events During fiscal April 2025, we borrowed $ 50.0 million under our Revolver at a current rate of 5.7 %. We subsequently repaid $ 20.0 million and have $ 30.0 million outstanding as of the date of this filing. See Note 10. -19-