Belden Inc

Ladies and gentlemen, thank you for standing by. Welcome to this morning's Belden Incorporated conference call. Just a reminder, this call is being recorded. At this time, you are in a listen-only mode. Later, we will conduct a question and answer session. If you would like to ask a question, please press star 1 on your touchtone phone. If you are in the question queue and would like to withdraw your question, simply press star 2. I would now like to turn the call over to Jeremy Parks. Please go ahead, sir.

Thank you, Bettina. Good morning, everyone, and thank you for joining us today for Belden's second quarter 2022 earnings conference call. This is Jeremy Parks, Belden's chief financial officer. With me this morning is Belden's president and CEO, Roel Vestjens. Roel will provide a strategic overview of our business and then I will provide a detailed review of our financial and operating results, followed by Q&A. We issued our earnings release earlier this morning, and we have prepared a slide presentation that we will reference on this call. The press release, presentation, and transcript of these prepared remarks are currently available online at investor.belden.com. Turning to slide two in the presentation, During this call, management will make certain forward-looking statements. For more information, please review today's press release and our most recent annual report on Form 10-K. Additionally, during today's call, management will reference adjusted or non-GAAP financial information. In accordance with Regulation G, The appendix to our presentation in the investor relations section of our website contain a reconciliation of the most closely associated gap financial information to the non-gap financial information we communicate. I will now turn the call over to our president and CEO, Ruel Vestins.

Ruel. Thank you, Jeremy, and good morning, everyone. As a reminder, I'll be referring to adjusted results today. Now please turn to slide three for a summary of today's presentation. Before we begin the discussion of our second quarter results, I would like to revisit some of the key themes from the Investor Day event that we hosted at the New York Stock Exchange on June 15th. As we highlighted during Investor Day, Belden is a transformed company. Our portfolio of businesses and our financial performance are significantly improved. We delivered mid single-digit revenue growth and double-digit EBITDA and EPS growth over the last three years, a period that included a pandemic-driven recession, extreme inflationary pressures, and lasting supply chain disruptions. As I discussed, the pandemic and ensuing aftermath accelerated virtually all of the longer-term secular trends in our markets. Labor shortages, inflation, and supply chain bottlenecks are driving the need for more automation and reshoring. Remote work and changing workspaces are driving the need for additional bandwidth and for buildings to become smarter. We are executing a number of specific initiatives to ensure that Belden benefits from each of these important secular trends. To that end, we have enhanced our commercial processes and are now providing complete end-to-end solutions focused on customer business outcomes rather than individual products. We have dramatically revitalized our product portfolio with new integrated hardware and software solutions. And our recent acquisitions have provided innovative new capabilities to further augment our product roadmap. We did all of this to better serve our customers and fulfill a much broader corporate purpose, to build the foundation for a digital world. We expect this to result in robust and sustainable organic growth and margin expansion, driving EPS to $8 or more by 2025. As we execute our plans, we would expect this to translate into very compelling returns for our shareholders. Turning to the financial results, I'm very pleased we delivered another strong quarter, our ninth straight quarter exceeding expectations. Our capital allocation strategy continues to be balanced and to drive shareholder value. Accordingly, we executed another $50 million in share repurchases through July, bringing the year-to-date total to $100 million. After a strong first half of 2022, we are increasing our guidance for the year. The revised revenue guidance now represents consolidated organic growth of 12% to 13% compared to our prior expectation of 7 to 9 percent. Additionally, we increased our EPS guidance by 25 cents at the high end, resulting in full-year EPS growth of 24 to 28 percent. Now please turn to slide four in our presentation for a review of the second quarter highlights. We delivered meaningful growth and margin expansion again this quarter. Second quarter revenues increased 16% year over year to $667 million, exceeding our guidance range of $625 to $640 million. I am pleased with the revenue performance, which was up 18% organically year over year. Our strong performance was broad-based across both the industrial automation solutions and enterprise solutions segments. Orders were healthy. and we built backlog again in both segments. We had another great quarter in industrial. Industrial automation revenues increased 20% organically in the second quarter. Market conditions remain healthy, and we continue to see compelling longer-term demand drivers for automation solutions as industrial customers respond to labor shortages, capacity requirements, and reshoring of production. Enterprise Solutions revenues increased 15% year-over-year on an organic basis in the second quarter, driven by strong end markets and share capture. Within the segment, revenues in smart buildings increased 14% organically. I continue to be pleased with the strong execution by our teams as we benefit from our commercial focus on growth verticals, such as data centers, government, and healthcare facilities. Revenues in broadband and 5G increased 16% organically, driven by strong demand for fiber connectivity products. We see long-term secular trends in this market, driven by the ever-increasing demand for high-speed broadband and the resulting investments required to upgrade networks. We continue to invest in our business to drive growth and support our strategic plans. Now, one great example is the recent grand opening of our new manufacturing and R&D facility in Kochi, India, which serves as a key hub for global product development in broadband and 5G. In addition to expanding our fiber manufacturing capacity, the facility also features an R&D testing laboratory for cutting edge fiber technologies that has been certified to meet the most strict quality standards of our key customers. This new facility exemplifies our continued commitment to growth. EBITDA in the second quarter increased 19% year-over-year to $111 million. EBITDA margins expanded 50 basis points from 16.1% in the year-ago period to 16.6%. EPS increased 31% year-over-year to $1.60 compared to $1.22 in the year-ago period and our guidance range of $1.35 to $1.45. Additionally, we ended the quarter well positioned, with net leverage of 1.4 times, now below our target of 1.5 times. In summary, this was another excellent quarter for Belden, and I'm very proud of the achievement of our teams. We continue to transition Belden from a supplier of trusted products to a value-added partner in the design and implementation of networking infrastructure solutions. We are making great progress, which is reflected in our strong financial performance. I will now ask Jeremy to provide additional insight into our second quarter financial performance. Jeremy?