Belden Inc (BDC) 2015 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to this morning's Belden Inc. fourth-quarter 2015 earnings release conference call. Just a reminder, this call is being recorded.

(Operator Instructions)

I would now like to turn the call over to Matt Tractenberg. Please go ahead, sir.

Thank you, Tracy. Good morning, everyone, and thank you for joining us today for Belden's fourth-quarter and full-year 2015 earnings conference call. My name is Matt Tractenberg. I'm Belden's Vice President of Investor Relations. With me here this morning are John Stroup, President and CEO; and Henk Derksen, Belden's CFO. John will provide a strategic overview of our business, and then Henk 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 2 in the presentation, during this call, Management will make certain forward-looking statements. I'd like to remind you that any forward-looking information we provide is given in reliance upon the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The comments we will make today are Management's best judgment based on information currently available. Actual results could differ materially from any forward-looking statements that we make, and the Company disclaims any obligation to update this information to reflect future developments after this call.

For a more complete discussion of the factors that could have an impact on the Company's actual results, please review today's press release and our 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, we have provided a reconciliation of the most closely associated GAAP financial information to the non-GAAP financial information we communicate. This reconciliation is in the appendix of the presentation and has been posted separately to the Investor Relations section of our website. I'll now turn the call over to our President and CEO, John Stroup. John?

Thank you, Matt, and good morning, everyone. As a reminder, I'll be referring to adjusted results today. Please turn to slide 3 in our presentation for a review of our fourth-quarter highlights.

We are thrilled to report record results for the quarter and the full year. Despite a host of challenging macroeconomic factors, our attractive portfolio, robust business system, and dedicated global team was up to the challenge. This level of earnings growth and margin expansion in this macro-economic environment is obviously quite special. I'm extremely pleased with our record fourth-quarter performance including gross profit margins, EBITDA margins, and earnings per share.

Free cash flow was exceptional in the quarter totaling almost $130 million. This allowed us to pay down $150 million of debt, bringing our net leverage to 3.6 times EBITDA at the end of the year, an improvement of 0.3 turns since the third quarter.

Debt reduction will remain a priority this year as we strive to achieve our goal of approximately 3 times EBITDA in 2016. I'd like to thank our associates for their hard work during the quarter and their commitment to aggressively executing our strategic plan. Overall, the business performed well with strong results from our broadband connectivity, enterprise, and network security businesses.

Revenues for the fourth quarter were $602.5 million. On a constant currency basis, revenues grew by 2.9%. A stronger US dollar and lower copper prices had an approximate $41.5 million unfavorable impact on revenues.

Our enterprise and network security platforms delivered robust organic growth of 7.8% and 13.1% respectively. In line with both expectations and pure results, the softer macroenvironment impacted both of our industrial platforms, declining 10.3% organically on a combined basis. All of these results are on a year-over-year basis.

Gross profit margins were 43.1% for the fourth quarter, an increase of 570 basis points from the year-ago period and a Company record. This improvement was a result of productivity initiatives and successful acquisition integration. I'm especially pleased with our EBITDA margins in the fourth quarter, a record 19%, a year-over-year increase of 270 basis points. As a result, we delivered a Company record $114.6 million of EBITDA during the quarter, an increase of 14.9% from the prior-year period. This resulted in record earnings per diluted share of $1.63 in the fourth quarter, an increase of 31.5% from the year-ago period.

Please turn to slide 4 for a brief discussion of our full-year 2015 results. It was a year of external challenges and internal successes. A rapidly strengthening US dollar, drastically falling energy prices, and emerging market volatility required us to take swift action to protect margins. I believe we identified the right issues quickly and it took appropriate measures. But we also celebrate our successes, and market share captured during the year was exceptional. With all our platforms contributing, it's clear that our market delivery system, investments and product innovation, and customer satisfaction programs are working.

Revenues for the year were a record $2.36 billion. A stronger US dollar and lower copper prices had an approximate $173 million unfavorable impact on revenues during the year. On a constant currency basis, revenues grew by 7.4% from the full-year 2014. Record gross-profit margins were 41.6% for the year, an increase of 460 basis points from 2014 and continue to be best in class.

As we've done consistently for years, share capture, effective acquisition integration, and productivity initiatives allowed us to drive EBITDA margins to their highest level in Company history, 17% of revenues for the full year, an increase of 150 basis points from 2014. We remain focused on attaining the goal of EBITDA margins within 18% to 20% for a full-year period. Earnings per share was $4.98, also a Company record and an increase of 17.7% from the prior year.

Please turn to slide 5 for a review of our business-segment results. Broadcast revenue in the quarter was $239.5 million as compared to $253.2 million in the year-ago period. A stronger US dollar and lower copper prices had an approximate $10.2 million unfavorable impact on revenues relative to last year. Demand varied by geography with revenues in the United States up 7.4%. Revenues in EMEA declined 17% in the period due in part to the strong US dollar and low oil prices. EBITDA margins were 19.5%, increasing 200 basis points year over year and benefiting from the weaker Canadian dollar.

While demand outside the United States is challenging, the team looks forward to growth in 2016. In addition to the Summer Olympics and US presidential elections, we are excited by the progress made with our comprehensive IP solution. During the quarter, we booked seven new IP projects and shipped four of them. Also, we entered 2016 with almost $15 million more backlog than one year ago.

Revenue within our enterprise platform was $109.4 million. Changes in currency and copper prices had an approximate $10 million unfavorable impact on revenues relative to last year. On an organic basis, revenues increased by 7.8% year over year. EBITDA margins were 16.7% during the quarter, an increase of 360 basis points from the prior-year period. Congratulations to the Team on an outstanding year in both revenue growth and margin expansion.

Our industrial platforms experienced the same market softness that many of our peers, customers, and partners have recently reported. Changes in currency and copper prices had an unfavorable impact to combined revenues of $21.2 million relative to last year. Revenues declined organically by 10.3%, a result of reduced demand from our oil and gas customers and US machine builders impacted by the strong US dollar.

Industrial connectivity had revenue for the quarter of $141.8 million, down 10.5% organically from the year-ago period. Growth in Asia up 6.4% was driven by demand from discrete manufacturers. This was offset by weakness in the United States and Canada, down 14.8% year over year, a result of the previously mentioned items.

EBITDA margins were 16.8% for the fourth quarter, up 160 basis points. I am pleased with the platform's ability to expand profit margins in this challenging environment, a function of improved mix and lower input costs.

Industrial IT had revenue of $62.8 million, a decrease of 10% organically from the fourth quarter of 2014. This was somewhat offset by exceptional growth of 18% from our European customers who are benefiting from the weaker euro.

The Teams also capitalized on some great opportunities in China during the quarter, winning six transportation projects worth several million dollars combined. As a result of this lower volume, EBITDA margins decreased 250 basis points from the year-ago period.

The productivity initiatives introduced last quarter for the industrial platforms include manufacturing consolidation. Those programs are on track to deliver $6 million of savings in 2016 and $17 million of savings in 2017.

And finally, our network-security platform increased revenues by 13.1% organically to $48.9 million. Bookings during the quarter increased 19.2%, a solid finish to their first year with Belden. During the quarter, notable performance was seen in Asia and EMEA with orders from new customers doubling from the prior year. It was also another record quarter for large projects at Tripwire highlighting the value they bring to large global customers.

EBITDA margins in the quarter were 30% for the full-year 2015. Tripwire slightly exceeded the targets we set for ourselves upon announcement and added more than 250 new customers. I look forward to another successful year in 2016.

I will now ask Henk to provide additional insight into our fourth-quarter financial performance. Henk?

Think you, John. I will start my comments with results for the quarter followed by a review of our operations and segment results, discussion of the balance sheet, and close with our cash-flow performance. As reminder, I'll be referencing adjusted results today. Please turn to slide 6 for a detailed consolidated review.

Fourth-quarter consolidated revenues were $602.5 million. Compared to the fourth-quarter 2014, revenues declined 1.8% from $613.7 million. Currency translation unfavorably impacted revenue by approximately $29 million compared to the year-ago period. After adjusting for this, revenues increased in the fourth quarter by 2.9% year over year.

Copper had an unfavorable impact of $12.6 million, and acquisitions contributed $50.8 million. On an organic basis, revenues declined 3.3% from the year-ago period. Sequentially, revenues increased $12.4 million from $590.1 million. On an organic basis, revenues increased 3.4% in line with typical seasonality. Gross profit margins were a record 43.1%, increasing 570 basis points from the year-ago period. Inorganic activities contributed 390 basis points with productivity driving the remainder. Sequentially, gross profit margins increased 230 basis points. This was a function of productivity and a richer mix from seasonality.

Operating expenses for the quarter were $156.7 million or 26% of revenue. After adjusting for the impacts of currency and acquisitions, operating expenses declined $5.8 million year over year attributable to productivity programs. On a constant currency basis, operating expenses increased $2.5 million sequentially; this was driven by investments and new product development. EBITDA margins for the quarter were a record 19%, up 270 basis points year over year and 250 basis points sequentially. Net interest expense for the quarter was $26.6 million, an increase of $3.3 million from the year-ago period.

We expect interest expense to be approximately $25 million in the first quarter and $95 million for the full-year 2016. The adjusted effective tax rate for the fourth quarter was 9.6%, which compares favorable to our guided 17%, a result of recent changes in US tax legislation. For financial modeling purposes, we recommend using a 20% effective tax rate for the first-quarter and full-year 2016. EPS increased 31.5% from the year-ago period and 43% sequentially to a record of $1.63 per share in the fourth-quarter 2015. For the full-year 2015, EPS increased 17.7% to $4.98, a Company record.

Please turn to slide 7. I will now discuss revenues and operating results by business segment. Broadcast solutions generated revenues of $239.5 million during the fourth quarter. Compared to the year-ago period, revenues decreased $13.7 million from $253.2 million. After adjusting for changes in copper and currency, organic revenues decreased 1.4% year over year. Sequentially, revenues increased $11.4 million, in line with typical seasonality.

EBITDA margins of 19.5% reflect an increase of 200 basis points year over year, a function of effective execution on cost-improvement programs announced earlier in the year. Sequentially EBITDA margins increased 420 basis points, a result of continued productivity improvements and a favorable mix.

Our enterprise-connectivity platform generated revenues of $109.4 million during the fourth quarter, decreasing $1.4 million year over year from $110.8 million. This platform faced a $5.8 million headwind from currency translation and a $4.2 million unfavorable impact from lower copper prices. On an organic basis, growth in the quarter was 7.8% year over year, a result of solid demand for our products and strong execution by the Team. Sequentially, revenues decreased $4.4 million, a decrease of 2.1% organically, better than typical seasonality. EBITDA margins increased 360 basis points year over year and 70 basis points sequentially. For the full-year 2015, EBITDA margins were 16.1%, expanding 160 basis points on a year-over-year basis, an outstanding performance.

The industrial-connectivity platform generated revenues of $141.8 million. This platform's revenues were negatively impacted by $9 million from currency translation and $6.6 million from copper compared to the fourth quarter of 2014. Organic revenues declined 10.5% year over year and 2% sequentially. However, I'm encouraged by the strong book-to-bill ratio of 1.06 for the quarter. EBITDA margins of 16.8% increased 160 basis points year over year due primarily to mix and lower input costs. Sequentially, margins improved 110 basis points, a function of productivity improvements in the quarter.

The industrial-IT platform generated revenues of $62.8 million, declining $13.2 million from the year-ago period. Currency negatively impacted revenues by $5.7 million compared to the year-ago period. On an organic basis, revenues declined 10% from the fourth quarter of 2014. Sequentially, revenues increased $3.6 million, an increase of 7.1% organically. EBITDA margins of 18.4% declined 250 basis points year over year. Sequentially they improved 70 basis points a result of leverage on volume.

Finally, our network-security platform continues to perform well generating revenues of $48.9 million in the fourth quarter, up $7.5 million sequentially. EBITDA margins for the quarter were 30%, increasing 280 basis points sequentially.

If you will please turn to slide 8, I will begin with our cash balance sheet highlights. Our cash and cash-equivalents balance at the end of the fourth quarter was $217 million compared to $242 million in the prior quarter and $741 million in the prior year as we prepared to acquire Tripwire.

During the fourth quarter, we paid down $150 million of our outstanding debt, reducing our balance from $1.91 billion in the third quarter to $1.75 billion at the end of the fourth quarter. Inventory turnover was 7.1 turns, an improvement of 0.2 turns year over year and 0.4 turns sequentially. Day-sales outstanding was 62 days in the fourth quarter, an increase of three days year over year and a decrease of one day sequentially. PP&E turnover was 7.7 turns, an improvement of 0.3 turns sequentially and remains flat year over year. As expected, net leverage was 3.6 times net debt to EBITDA at the end of the quarter. We continue to focus on achieving our target net leverage of approximately 3.0 times by the end of this year.

Please turn to slide 9 for a few cash-flow highlights. Cash flow provided by operating activities for the fourth quarter were $144.4 million. Net capital expenditures for the quarter were $15.5 million. Free cash flow was $129 million in the fourth quarter of 2015. As expected, free cash flow for full-year 2015 was $182 million or 85% of net income. This was a result of cash allocated to productivity programs in the year. Achieving free cash flow above net income remains a priority in 2016.

That completes my prepared remarks. I would now like to turn this call back to our CEO, John Stroup, for the outlook. John?

Thank you, Henk. Please turn to slide 10 for our outlook regarding the first-quarter and full-year 2016 results. While the world seems to finally be coming to grips with the reality of an industrial recession, Belden's portfolio and operating structure has the ability to perform well in a variety of business climates.

We anticipate first-quarter 2016 revenues to be between $530 million and $550 million, and adjusted income from continuing operations per diluted share is expected to be between $0.90 and $1. For the full year, we continue to expect revenues to be between $2.295 billion and $2.345 billion. The expected range of adjusted income for continuing operations per diluted share is still $5.10 to $5.40.

That concludes our prepared remarks. Tracy, please open the call to questions.

(Operator Instructions)

Shawn Harrison with Longbow Research.

Good morning, everyone. Can you hear me?

Yes. Hello, Sean.

I guess the first question is, considering guidance was unchanged from 90 days ago, the world -- at least the stock market -- feels a little bit different. If you could maybe talk about what puts and takes you've seen across the business as you think about 2016 now, if any, relative to when you held that Analyst -- I guess it was even just 60 days ago that you had Analyst Day event.

Yes, Shawn, I would say, from the December Analyst Investor Day we had until now, internally nothing has really changed. We haven't really seen any changes in order patterns, any changes in customer sentiment. I would say, externally, it sure feels to me like the rest of the world is starting to feel the same way we were expressing ourself last December. So it does feel to me like the sentiment may be caught up a little bit to what we were sharing with folks back in December. And of course, all the way back to Q2 when we first said, look, we are starting to see some weakness in our industrial funnel.

But the quarter played out almost exactly as we expected. Strength in Tripwire, strength in enterprise, strength in broadband, weakness in our industrial businesses. Our orders in January are exactly where we thought they would be. So, although none of us like having to deal with weakness in our industrial businesses, I would say that things are happening very much as we thought they would.

That's helpful, John.

I guess one of the focus areas for the year is within broadcast, particularly Grass Valley. I'm seeing a potential [bumpy] there from the US elections or the Olympics. Is there any change in thinking about how that benefits Grass Valley in 2016?

I'd say our thinking is the same. We believe there will be some growth in 2016 compared to 2015 with Grass Valley for the reasons you cited. We are also encouraged by the success early, albeit, of our IP products having booked seven projects and shipped four in the fourth quarter. That's obviously a very good sign. And orders in January were good for Grass Valley. We are entering the year with more backlog than we had a year ago -- $15 million more. So if you just take the backlog head start compared to the revenues in 2015, you've got almost 4% growth right there. So it feels to me like we're on track for growth in 2016 with Grass Valley compared to 2015.

Great, and one last question, if I may. Is there any debt reduction planned in the first half of 2016 incrementally?

As you know, Shawn, our free cash flow is seasonally back-end loaded. In the first quarter, we have a number of cash outflows, including rebates to our distributor partners, including the payment of our management incentive program. And so I think it's unlikely that there would be substantial debt reduction in the first quarter or half. Most of it's going to come in the second half.

Great. John, thanks so much and congrats on the results, everybody.

Thanks very much.

Noelle Dilts with Stifel Nicolaus.

Thanks. Good morning.

My first question is pretty broad, but -- just hoping you could walk us through some of your expectations for the four platforms as we look into 2016, and how to think about revenue growth and margins across the four platforms.

Sure. In 2016, it's our expectation that we are going to continue to see strong revenue growth in our network security platform, our enterprise connectivity platform; and in the broadcast platform, as I mentioned, we would expect to see modest growth with Grass Valley, and I would expect us to see strong growth, again, out of our broadband connectivity business. I think our industrial businesses will experience contraction on a full-year basis. I think it will be not as severe as what we experienced in the fourth quarter. I think that we are looking at probably mid-single-digit declines in our industrial platforms in 2016. From a margin point of view, I think that all of our businesses are going to see margin expansion.

Clearly, in our broadcast platform we have the benefit of the cost reduction programs we started in the second quarter. In our industrial platforms, we have the benefit of the productivity initiatives that we announced last quarter. And as I mentioned, we've got $6 million of planned benefit in 2016 from those initiatives and an additional $11 million in 2017, bringing it to $17 million. I would say the only platform where margin expansion may not occur, or if it did, it would be modest, is with network security. I think the business model is intact, and we are not really pursuing margin expansion; we are pursuing top-line growth, and we will continue to aggressively invest in R&D. But I think that all the businesses are in really good shape given the circumstances. And I think we are going to be pretty close, if not at the low end of our EBITDA margin goal on a consolidated basis -- and as a reminder, that's 18% to 20%. So I think we're going to be at the low end or we'll be awful close to hitting that number.

Great, that's helpful.

Turning quickly back to network security, obviously really good performance this year, exceeding your target. Can you just expand upon that growth that you are targeting? Good results out of Asia and EMEA -- can you just discuss how you are looking at the opportunities right now in North America versus international; and just generally if you are starting to think about, if you can, maybe a few of the targets that you laid out for us when you first made the acquisition?

I would say that the strong performance in the fourth quarter outside of the United States was predominantly good execution by our team. It's a small percentage of our total revenue today. The team made a decision to increase and adjust their investments outside the United States, and it showed up in the results in the fourth quarter. Most of the business is still being driven by US commercial investment, so enterprises in the US still makes up the majority of our business. We have strong performance there; we would expect that to continue. The only area, really, that's been disappointing for the Tripwire team has been the federal vertical. It's been slower than we expected.

We had very good growth out of our utility initiative, which is our first target vertical within the OT sector, and we would expect that to continue. But we also have a number of other investments that we've made in other verticals within the OT initiative. So we are investing ahead of the revenue there. But we still think that, that's a tremendous opportunity in 2016 and beyond. So we are very bullish right now on the network security business and the opportunities that it gives us in the other platforms.

Okay. Thanks so much, John.

Yes.

Steven Fox with Cross Research.

Thanks. Good morning.

First question for me: the industrial connectivity book-to-bill that you highlighted -- can you just sort of dig into that a little bit, in terms of what types of applications or products was driving that positive book-to-bill?

I think the book-to-bill for industrial connectivity is 1.04 -- sorry 1.06. Thank you, Henk. And if I look at the order trends, I think that the strongest order trend was in the US, compared to the shipment trend. But it don't have detail for you by vertical, Steve, in terms of the order versus the shipments. Let me talk to you a little bit about shipments, though.

In the fourth quarter, our industrial business, as you can imagine, it was weak, relatively weak in all the verticals, but particularly weak in oil and gas. So that was a trend throughout the entire year, and it also showed up in the fourth quarter. So discrete, as an example, has continued to hang in pretty well. In fact, in the fourth quarter, revenues in our industrial platforms were up in Europe. And I think that's predominately because of the weak euro and European machine builders benefiting from a better cost structure.

The North America market was the one that was most challenging, and within North America, oil and gas was especially challenging. So, for example, our revenues in the oil and gas market in the fourth quarter globally were down 30%, and within United States and Canada, it was down about 35%. So going into 2016, it's our expectation that our markets are going to contract again. We think they are going to be down somewhere around 3% to 5%, with most of that contraction coming out of the oil and gas sector. We think it's probably down another 30% in 2016.

Great, that's helpful.

And then in terms of just the enterprise networking business, you had good growth there on an organic basis and the margins improved. So going forward, I guess two-part question. One is, is there room for further margin improvement? And then secondly, if you think about that market, where would you expect to get growth from, more so than less so, as you look at the year? Thanks.

Yes, so I think the lever that's most obvious for margin expansion with our enterprise platform is continued growth of our connectivity business, which has obviously been the primary area of focus for the team with the change in our go-to-market model two years ago with an emphasis on trying to drive more connector revenue. So that's clearly an area of focus and one of the best levers for margin expansion. And then secondarily, some of the manufacturing footprint actions that we've taken, the enterprise team is benefiting from that as well. So we are trying to address our cost structure also. But most of it I think is going to come through growth in the connectivity products.

Do you have the mix as to how much sales you got from connectivity for 2015 or Q4 handy?

Yes, for 2015, our connectivity revenue is still relatively small. It's about 25%, roughly, of the total business. And if we were reflecting the market, it would be more like 50/50. So we still have a lot of potential to sell connectors into existing customers that are buying our cable but not yet buying our connectors.

Great; that's all very helpful. Thanks so much.

Thank you.

(Operator Instructions)

William Stein with SunTrust.

Great. Thanks for taking my question, and congratulations on the good results today.

I'm wondering if you can talk about your interest and ability to make further adjustments to the portfolio in 2016, either from an acquisition or from a divestiture perspective.

Yes, on the acquisition side, there is obviously a couple of considerations. One is, as we mentioned already, our focus is on achieving the leverage target of 3 times EBITDA. So that's our priority right now, and so that's where our capital will be allocated first. And then secondly, in my experience, when you are in a macro environment like this, it takes a little time for the sellers' valuation expectations to adjust. And so if you have people out marketing their business today, they have a tendency to have an expectation on price that's more rearview mirror versus forward looking. So I think for those two reasons, I think if we did any acquisitions in 2016, they are likely to be modest in size.

In terms of opportunities for divestitures, I think that we are always considering -- as you would expect us to do -- whether or not there are things in the portfolio that don't fit our long-term plan, whether that's vertical exposure, geographic exposure, product technology obsolescence, things of that nature. And there is certainly nothing that's happening right now that's imminent. But we're continuously evaluating it, and if we feel like there is an opportunity that makes sense for our shareholders, then we would do so.

Thanks for that.

Maybe one more if I can on the bookings trends relative to what everyone reads in the papers and what we look at on our screens all day. You alluded to this in your comments about the backlog and order book coming in. I think you characterized it as in line with your expectations. It sounds if anything it looks like it's strengthening a bit. And I'm wondering if you can comment as to whether you think there is typically a feedback loop that would be generated at some point from folks looking at markets and newspapers and deciding to tap the brakes on orders? And if so, how quickly would you expect that to come into play? Or do think we are well past the potential for that to happen, and instead the markets are just reacting to somewhat older news?

I think that -- first, let me clarify my earlier comments. The comment I made about improved backlog position on a year-over-year basis was specific to our broadcast platform. So we are encouraged by the fact that our broadcast platform is entering the year with more backlog than it did a year ago and that gives us confidence for our growth expectation. As it relates to our orders in general, our fourth-quarter orders were as we expected. Our January orders have been as we expected. It feels to me like you really just have to be very specific about your end markets as it relates to your expectations. So I think that we are going to continue to see low oil prices throughout the year. I think we're going to continue to see a strong US dollar throughout the year, and that of course is not good news for industrial businesses. And as a result, our expectation is our industrial businesses are going to contract on a year-over-year basis.

Our nonresidential exposure within enterprise still looks good. We have roughly a nine-month lag between the starts of new construction and our products; and right now those are holding up well. Broadband looks good. Cyber security looks good. So I think that, when we were discussing with everybody back in the second quarter and then again in the third, about some of the trends we were seeing, quite honestly that was a more difficult conversation because we were sharing information that seemed to be ahead of the market. Now the conversations seem to be a lot easier only because I think the market has caught up. So I just feel like our view of the world right now is very consistent with what we have seen over the last six months, and at this point, we don't have anything more to add.

If I can squeeze one more in.

John, you mentioned that -- I think it's US oil and gas specifically down 30% this year; and next year you expect it to be down another 30%. If you put those together, should we think about this as 60% below peak? Or was peak actually higher and this is down even more? Specifically, what I am trying to get to is, whether the effects of this end market are so de-risked that perhaps you could see another modest drop in oil prices, and the revenue impact would be mitigated at this point?

Let me just start by making certain that the data we share with you is accurate. On a full-year basis, globally, our oil and gas business was down approximately 24%. Within North America, it was down approximately 27%. This is more or less a global phenomenon, as you might expect. We think, our planning is that on a global basis, the oil and gas market will be down another 30%. That's our current view. That's all off of 2015, which is likely a peak. I don't know that for certain, but my guess would be that 2014 is likely a peak, and my guess is that our oil and gas business of 2014 was the peak.

In terms of how to de-risk that, or characterize it -- first of all, it's probably important to know that with this decline, in 2015 oil and gas is 14% of our industrial business. Which means that it's roughly 5% to 6% of our total business. So if it was down further, it would be down further on a relatively small percentage of the total business. So is there a chance oil prices could go lower? Yes, I think it could. Is there a chance that the decline could be more than 30%? Yes, I think it could. But it would be off that very small number as it relates to the entire Belden business.

John, that's really helpful. Thanks, and congrats on the solid outlook.

Thank you very much.

Chip Moore with Canaccord.

Yes, thanks.

Don't want to beat a dead horse on the oil and gas, but back in December, I thought we were talking $40 oil. Just on that last commentary, maybe sensitivity around that?

When we were together in December, we tried to share with folks our view on oil prices and what the impact might be. I would say that, from December until now, our view on the oil and gas market is largely unchanged -- maybe slightly more negative than it was in December. But as it relates to our full-year guidance for the Corporation, there is as many things that changed favorably as this particular item that changed negatively. The thing I would emphasize is that it's a relatively small percentage of the total business -- 5% of the total Belden business. So in the fourth quarter, oil prices came down a little bit, but at the same time, our network security business had stronger orders than what we expected. We saw great strength out of our enterprise connectivity and broadband connectivity business. And that's why I reinforced my earlier comments that I think this portfolio is exceptionally well positioned for environments like this.

I never wish a recession on anyone, but I have to acknowledge that recessions are a wonderful opportunity for Belden to demonstrate what a great business we have and what a great team we have in terms of our ability to execute. And when the tide is rising, it's pretty easy for everybody to deliver good results; and when things are tough I think it's a little bit harder. So I just feel really good about where we are.

That's very helpful.

And on the Tripwire booking strength -- I know we talked about utility cross-selling starting to gain a little traction. Is that already showing up in bookings? Or is that something we should look out for later in the year into 2017? Thanks.

It was absolutely in our bookings in 2015, and I would expect it to continue in 2016. So a part of this really strong non-renewal booking growth in the fourth quarter includes utilities.

Thank you.

Tracy, any other questions?

There no further questions at this time.

Great. Thank you very much, and thank you, everyone, for joining today's call. If you have any questions, please reach out to the IR team here at Belden. Our email address is investor.relations@Belden.com. Have a great day, everyone.

Thank you, ladies and gentlemen. This concludes our call for today. You may now disconnect from the call and thank you for participating.