Black Box Corporation Reports Second Quarter and YTD Fiscal 2006 Results.PITTSBURGH Pittsburgh (pĭts`bərg), city (1990 pop. 369,879), seat of Allegheny co., SW Pa., at the confluence of the Allegheny and the Monongahela rivers, which there form the Ohio River; inc. 1816. -- Black Box Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BBOX) today reported for the second quarter ended October October: see month. 1, 2005 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of 74 cents compared to 60 cents last year. Net income for the second quarter was $12.8 million or 6.9% of revenues, compared to $10.6 million or 8.4% of revenues last year. On a sequential One after the other in some consecutive order such as by name or number. comparison basis, first quarter diluted earnings per share were 43 cents with corresponding net income of $7.4 million or 4.1% of revenues. Excluding acquisition related expenses in the second quarter of Fiscal 2006 described below, diluted earnings per share were 78 cents and net income was $13.6 million or 7.4% of revenues. During the second quarter of Fiscal 2006, the Company incurred non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $1.3 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta in connection with acquisition related expenses from the fourth quarter Fiscal 2005 purchase of Norstan, Inc. ("Norstan"). Management believes that presenting diluted earnings per share and net income excluding acquisition related expenses is useful to investors because it provides a more meaningful comparison of the ongoing operations of the Company. Total revenues for the second quarter were $185 million, an increase of 46% from $127 million for the same period last year. On a sequential comparison basis, first quarter revenues were $179 million. Second quarter cash provided by operating activities was approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $12 million or 91% of net income, compared to $11 million or 108% of net income for the same period last year. Second quarter free cash flow was $18 million compared to $10 million last year. On a sequential comparison basis, first quarter cash provided by operating activities was $11 million and free cash flow was $11 million. Black Box utilized its second quarter free cash flow of $18 million to fund $14 million of mergers and prior merger-related activity completed during the second quarter; net capital expenditures of $1 million; debt reduction of $2 million; and a dividend payment of $1 million. Management believes that free cash flow, defined by the Company as cash provided by operating activities less net capital expenditures, plus proceeds from option exercises, plus or minus foreign currency translation adjustments, is an important measurement of liquidity as it represents the total cash available to the Company. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with SEC Regulation G, the attached financial charts include a reconciliation of the non-GAAP financial measures in this release to the most directly comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measures. For the six months ended October 1, 2005, diluted earnings per share were $1.17 compared to $1.14 for the same period last year, up 3%. Corresponding net income for the six-month period was $20.2 million or 5.5% of revenues, compared to $20.6 million or 8.2% of revenues for the same period last year. Excluding restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. and acquisition related expenses for the six months ended October 1, 2005 described below, diluted earnings per share were $1.53 and net income was $26.3 million or 7.2% of revenues. Total non-cash charges incurred for the six months ended October 1, 2005 associated with acquisition related expenses of Norstan was $4.1 million pre-tax. For the six-month period ended October 1, 2005, the Company incurred a pre-tax restructuring charge of $5.3 million related to staffing level adjustments and real estate consolidations in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. .Total six-month revenues were $364 million, up 45% from $251 million for the same period last year. Cash provided by operating activities for the six-month period was $22 million or 111% of net income, compared to $21 million or 100% of net income last year. Free cash flow was $29 million compared to $24 million last year. Black Box utilized the six-month free cash flow of $29 million to fund $27 million of mergers and prior merger-related activity completed during the period and dividend payments of $2 million. The Company's 6-month order backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. was $104 million at October 1, 2005 compared to $97 million at the end of the first quarter. Commenting on the second quarter results, Fred (Friendly Rollabout Engineered for Doctors) A mobile medical conferencing unit. See videoconferencing. 1. FRED - Robert Carr. Language used by Framework, Ashton-Tate. 2. C. Young, Chief Executive Officer, said, "We are pleased with our overall second quarter results. This quarter was the best quarter we have had in over two years as measured by the composite composite, alternate common name for Asteraceae or Compositae, the aster family. composite - aggregate of total revenue, organic revenue growth, absolute EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. performance and cash flow. Contributing factors to this success include an improved global economy, excellent day-to-day day-to-day adj. 1. Occurring on a routine or daily basis: the day-to-day movements of the stock market. 2. execution and the successful integration of our mergers and acquisitions activity. Within the 46% total revenue growth over last year, we are particularly pleased with our 3% organic growth over last year and 4% organic growth from the sequential first quarter." Continuing on, Mr. Young said, "We like Black Box's current global leadership position in the communications marketplace. And we will look to build upon this leadership position via our major strength - seamlessly delivering the highest quality data, voice and hotline 1. (company) Hotline - Hotline Communications Ltd.. 2. (messaging) Hotline - Hotline Connect. technical services to our clients around the world." The Company will conduct a conference call beginning at 5:00 p.m. Eastern Standard Time today, November November: see month. 1, 2005. Fred C. Young, Chief Executive Officer, will host the call. To participate in the call, please dial 612-332-1025 approximately 15 minutes prior to the starting time Noun 1. starting time - the time at which something is supposed to begin; "they got an early start"; "she knew from the get-go that he was the man for her" commencement, get-go, offset, outset, showtime, start, kickoff, beginning, first and ask to be connected to the Black Box Earnings Call. A replay of the conference call will be available for one week after the teleconference by dialing 320-365-3844 and using access code 798794. Any forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. contained in this release are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. You can identify these forward-looking statements by the fact they use words such as "should," "anticipate," "estimate," "approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. ," "expect," "target," "may," "will," "project," "intend," "plan," "believe," and other words of similar meaning and expression in connection with any discussion of future operating or financial performance. One can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Forward-looking statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. Although it is not possible to predict or identify all risk factors, they may include levels of business activity and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , expenses relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc corporate compliance requirements Compliance requirements are a series of directives established by United States Federal government agencies that summarize hundreds of Federal laws and regulations applicable to Federal assistance (also known as Federal aid or Federal funds). , cash flows, global economic conditions, successful integration of the Norstan business, the timing and costs of restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). programs, successful marketing of DVH DVH Dose-Volume Histogram DVH De Vliegende Hollander DVH Department for the Visually Handicapped DVH Division for Visually Handicapped (Data, Voice, Hotline) services and successful implementation of our M&A program, including identifying appropriate targets, consummating transactions and successfully integrating the businesses. Additional risk factors are included in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . We can give no assurance that any goal, plan or target set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. We undertake no obligation to release publicly any revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to forward-looking statements as a result of future events or developments. Black Box is the world's largest technical services company dedicated to designing, building and maintaining today's complicated data and voice infrastructure systems. Black Box services 152,000 clients in 141 countries with 139 offices throughout the world. To learn more, visit the Black Box website at www.blackbox
In Unix computing, Blackbox is a window manager for the X Window System. .com. Black Box and the Double Diamond logo are registered trademarks of BB Technologies, Inc.
BLACK BOX CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Three months ended Six months ended
--------------------- ---------------------
In thousands, except per October 1, October 2, October 1, October 2,
share 2005 2004 2005 2004
----------------------------------------------------------------------
Revenues $185,050 $126,595 $364,332 $250,950
Cost of sales 111,168 74,280 219,510 146,755
---------- ---------- ---------- ----------
Gross profit 73,882 52,315 144,822 104,195
Selling, general &
administrative exp 50,647 35,227 101,567 71,124
Restructuring charges -- -- 5,290 --
Intangibles amortization 1,328 69 2,886 128
---------- ---------- ---------- ----------
Operating income 21,907 17,019 35,079 32,943
Interest expense, net 2,330 508 4,289 917
Other expenses/(income), net 40 40 (35) 47
---------- ---------- ---------- ----------
Income before income taxes 19,537 16,471 30,825 31,979
Provision for income taxes 6,740 5,848 10,634 11,353
---------- ---------- ---------- ----------
Net income $12,797 $10,623 $20,191 $20,626
========== ========== ========== ==========
Basic earnings per common
share $0.75 $0.61 $1.19 $1.17
========== ========== ========== ==========
Diluted earnings per common
share $0.74 $0.60 $1.17 $1.14
========== ========== ========== ==========
Weighted average common
shares 17,022 17,425 16,933 17,601
========== ========== ========== ==========
Weighted average common &
common equivalent shares
outstanding 17,374 17,705 17,208 18,068
========== ========== ========== ==========
BLACK BOX CORPORATION
CONSOLIDATED BALANCE SHEETS
October 1, March 31,
In thousands 2005 2005
----------------------------------------------------------------------
Assets
Cash and cash equivalents $11,925 $11,592
Accounts receivable, net 131,757 116,865
Lease receivables 645 1,697
Inventories, net 53,154 57,176
Costs and estimated earnings in excess
of billings on uncompleted contracts 24,052 25,695
Deferred tax asset 10,496 9,236
Net current assets of discontinued operations 292 549
Other current assets 18,291 14,724
---------- ---------
Total current assets $250,612 237,534
---------- ---------
Property, plant and equipment, net 36,330 38,268
Goodwill, net 457,362 444,567
Intangibles, net 51,403 44,157
Lease receivables, net of current portion 281 473
Deferred tax asset 4,561 3,793
Discontinued operations, net of current portion 248 373
Other assets 4,019 3,725
---------- ---------
Total assets $804,816 $772,890
========== =========
Liabilities
Current maturities of long-term debt $576 $692
Current maturities of discounted lease rentals 247 890
Accounts payable 38,301 36,032
Billings in excess of costs and estimated
earnings on uncompleted contracts 11,472 8,947
Deferred revenue 21,931 21,456
Accrued liabilities:
Compensation and benefits 11,382 13,073
Restructuring 5,451 6,709
Other liabilities 38,320 33,905
Income taxes 9,744 3,295
---------- ---------
Total current liabilities 137,424 124,999
---------- ---------
Long-term debt 149,308 147,196
Discounted lease rentals 6 30
Other liabilities 75 75
Restructuring reserve 8,548 9,889
Stockholders' Equity
Common stock 24 24
Additional paid-in capital 345,713 336,290
Retained earnings 446,786 428,632
Treasury stock, at cost (296,807) (296,797)
Accumulated other comprehensive gain 13,739 22,552
---------- ---------
Total stockholders' equity 509,455 490,701
---------- ---------
Total liabilities and stockholders' equity $804,816 $772,890
========== =========
BLACK BOX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended Six Months Ended
--------------------- ---------------------
October 1, October 2, October 1, October 2,
In thousands 2005 2004 2005 2004
----------------------------------------------------------------------
Operating Activities
Net income $12,797 $10,623 $20,191 $20,626
Adjustments to reconcile
net income to cash
provided by operating
activities:
Intangibles amortization 1,328 69 2,886 128
Depreciation 2,261 1,284 4,494 2,712
Deferred taxes 440 (926) (2,053) 538
Stock compensation expense -- 680 -- 680
Tax impact from exercised
options (1,940) (12) (1,971) (3,157)
Changes in operating assets
and liabilities:
Account receivable, net (13,698) 4,641 (8,913) 8,104
Inventories, net 672 (699) 5,704 (2,098)
Other current assets 7,675 (829) 304 (1,808)
Proceeds from lease
contracts 547 -- 1,282 --
Accounts payable and
accrued liabilities 1,589 (3,348) 550 (5,007)
-------------------------------------------
Net cash provided by
operating activities $11,671 $11,483 $22,474 $20,718
-------------------------------------------
Investing Activities
Capital expenditures, net (920) (644) (599) $(941)
Acquisition of businesses,
net of cash acquired (13,362) -- (26,854) --
Prior merger-related
payments (209) (84) (165) (347)
-------------------------------------------
Net cash used in investing
activities $(14,491) $(728) (27,618) $(1,288)
-------------------------------------------
Financing Activities
Repayments / (proceeds)
on borrowings, net $(2,359) $4,185 $713 $15,976
Repayments on discounted
lease rentals (244) -- (667) --
Proceeds from exercise of
options 7,316 45 7,452 5,685
Payment of dividends (1,010) (871) (2,021) (1,774)
Deferred financing costs -- (235) -- (235)
Purchase of treasury stock (10) (12,718) (10) (37,574)
-------------------------------------------
Net cash provided / (used)
in financing activities $3,693 $(9,594) $5,467 $(17,922)
Foreign currency exchange
impact on cash $44 $(761) $10 $(1,101)
-------------------------------------------
Increase in cash & cash
equivalents $917 $400 $333 $407
Cash & cash equivalents at
beginning of period $11,008 9,313 $11,592 9,306
-------------------------------------------
Cash & cash equivalents at
end of period $11,925 $9,713 $11,925 $9,713
===========================================
RECONCILIATIONS:
In addition to reported results under U.S. GAAP for the fiscal
periods, the following financial highlights tables also include, where
appropriate, a reconciliation of free cash flow, cash provided by
operating activities excluding restructuring payments and satisfaction
of a litigation judgment, net income excluding restructuring charges
and acquisition related expenses and diluted EPS excluding
restructuring charges and acquisition related expenses (which are
non-GAAP measures), to the most directly comparable GAAP measure. All
dollar amounts are in thousands.
A reconciliation of cash provided by operating activities to free cash
flow is presented below:
2Q06 2Q05 2Q06YTD 2Q05YTD
----------------------------------------------------------------------
Cash provided by operating
activities $11,671 $11,483 $22,474 $20,718
Capital expenditures (1,108) (900) (1,600) (1,641)
Capital disposals 188 256 1,001 700
Proceeds from stock option
exercises 7,316 45 7,452 5,685
Foreign currency exchange
impact on cash 44 (761) 10 (1,101)
----------------------------------------------------------------------
Free cash flow $18,111 $10,123 $29,337 $24,361
----------------------------------------------------------------------
A reconciliation of cash provided by operating activities to cash
provided by operating activities excluding restructuring payments and
satisfaction of a litigation judgment is presented below:
2Q06 2Q05 2Q06YTD 2Q05YTD
----------------------------------------------------------------------
Cash provided by
operating activities $11,671 $11,483 $22,474 $20,718
Restructuring payments 2,786 -- 7,628 --
Satisfaction of a
litigation judgment -- -- 1,778 --
----------------------------------------------------------------------
Cash provided by
operating activities
excluding restructuring
payments and satisfaction
of a litigation judgment $ 14,457 $ 11,483 $ 31,880 $ 20,718
----------------------------------------------------------------------
A reconciliation of net income to net income excluding restructuring
charges and acquisition related expenses is presented below:
2Q06 2Q05 2Q06YTD 2Q05YTD
----------------------------------------------------------------------
Net income $12,797 $10,623 $20,191 $20,626
% of revenues 6.9% 8.4% 5.5% 8.2%
Restructuring charges,
after tax impact -- -- 3,465 --
Acquisition related
expenses, after tax impact 834 -- 2,689 --
----------------------------------------------------------------------
Net income excluding
restructuring charges and
acquisition related
expenses $13,631 $ 10,623 $ 26,345 $ 20,626
% of revenues 7.4% 8.4% 7.2% 8.2%
----------------------------------------------------------------------
A reconciliation of diluted earnings per common share (EPS) to diluted
EPS excluding restructuring charges and acquisition related expenses
is presented below:
2Q06 2Q05 2Q06YTD 2Q05YTD
----------------------------------------------------------------------
Diluted EPS $0.74 $0.60 $1.17 $1.14
EPS impact of restructuring
charges -- -- 0.20 --
EPS impact of acquisition related
expenses 0.05 -- 0.16 --
----------------------------------------------------------------------
Diluted EPS excluding
restructuring charges and
acquisition related expenses $0.78 (1) $ 0.60 $ 1.53 $ 1.14
----------------------------------------------------------------------
(1) Diluted EPS excluding restructuring charges and acquisition
related expenses table does not sum due to rounding.
SUPPLEMENTAL INFORMATION:
Additionally, the following supplemental information is being provided
for comparisons of second quarter ended October 1, 2005 reported
results to this year's first quarter and prior year's second quarter.
All dollar amounts are in thousands unless noted otherwise.
Information on revenues and operating income by geography is presented
below. Management believes it is important to separately present the
Fiscal 2006 restructuring charges and acquisition related expenses
(hereafter referred to as "special charges"). Management believes this
enables a clearer understanding of the ongoing operations of the
Company.
2Q06 1Q06 2Q05 2Q06YTD 2Q05YTD
----------------------------------------------------------------------
Revenues:
North America $146,754 $136,861 $84,792 $283,615 $164,324
Europe 29,199 33,750 32,830 62,949 68,390
All Other 9,097 8,671 8,973 17,768 18,236
--------------------------------------------------
Total $185,050 $179,282 $126,595 $364,332 $250,950
Operating Income:
North America $16,537 $11,859 $10,835 $28,396 $18,745
% of North America
revenues 11.3% 8.7% 12.8% 10.0% 11.4%
Europe 3,427 $(367) $3,697 3,060 $9,349
% of Europe
revenues 11.7% (1.1)% 11.3% 4.9% 13.7%
All Other 1,943 $1,680 $2,487 3,623 $4,849
% of All Other
revenues 21.4% 19.4% 27.7% 20.4% 26.6%
--------------------------------------------------
Total $21,907 $13,172 $17,019 $35,079 $32,943
% of total
revenues 11.8% 7.3% 13.4% 9.6% 13.1%
Special Charges:
North America $1,274 $4,379 $-- $5,653 $--
Europe -- 3,742 -- 3,742 --
All Other -- -- -- -- --
--------------------------------------------------
Total $1,274 $8,121 $-- $9,395 $--
Operating Income Excluding
Special Charges:
North America $17,811 $16,238 $10,835 $34,049 $18,745
% of North America
revenues 12.1% 11.9% 12.8% 12.0% 11.4%
Europe 3,427 $3,375 $3,697 6,802 $9,349
% of Europe
revenues 11.7% 10.0% 11.3% 10.8% 13.7%
All Other 1,943 $1,680 $2,487 3,623 $4,849
% of All Other
revenues 21.4% 19.4% 27.7% 20.4% 26.6%
--------------------------------------------------
Total 23,181 $21,293 $17,019 $44,474 $32,943
% of Total
revenues 12.5% 11.9% 13.4% 12.2% 13.1%
----------------------------------------------------------------------
Information on revenues and gross profit for data services, voice
services and hotline services is presented below:
2Q06 1Q06 2Q05 2Q06YTD 2Q05YTD
----------------------------------------------------------------------
Revenues:
Data Services $52,584 $52,901 $50,537 $105,485 $98,726
Voice Services 78,410 72,929 19,086 151,339 37,400
Hotline Services 54,056 53,452 56,972 107,508 114,824
--------------------------------------------------
Total $185,050 $179,282 $126,595 $364,332 $250,950
Gross Profit:
Data Services $15,482 $15,524 $15,366 $31,006 $29,862
% of Data Services
revenues 29.4% 29.3% 30.4% 29.4% 30.2%
Voice Services $31,173 $27,838 $6,732 $59,011 $13,138
% of Voice
Services revenues 39.8% 38.2% 35.3% 39.0% 35.1%
Hotline Services $27,227 $27,578 $30,217 $54,805 $61,195
% of Hotline
Services revenues 50.4% 51.6% 53.0% 51.0% 53.3%
--------------------------------------------------
Total $73,882 $70,940 $52,315 $144,822 $104,195
% of total
revenues 39.9% 39.6% 41.3% 39.8% 41.5%
----------------------------------------------------------------------
Information on revenues on a same-office basis as compared to prior
year is presented below:
2Q06 2Q05 Change
----------------------------------------------------------------------
Revenues as reported $185,050 $126,595 46%
Less revenues from offices added since
2Q05 (54,920) --
----------------------------
Revenues on same-office basis $130,130 $126,595 3%
----------------------------------------------------------------------
Information on revenues on a same-office basis as compared to prior
quarter is presented below:
2Q06 1Q06 Change
----------------------------------------------------------------------
Revenues as reported $185,050 $179,282 3%
Less revenues from offices added since
2Q05 (54,920) (53,582)
----------------------------
Revenues on same-office basis $130,130 $125,700 4%
----------------------------------------------------------------------
Information on various balance sheet ratios, backlog and head count is
presented below. Dollar amounts are in millions.
2Q06 1Q06 2Q05
----------------------------------------------------------------------
Accounts Receivable:
Gross Accounts
Receivable $ $139.5 $122.7 $98.0
Reserve $ / % $7.7/5.5% $7.6/6.2% $9.2/9.4%
------ ------ ------
Net Accounts
Receivable $ $131.8 $115.1 $88.8
Net Days Sales 57 days 55 days 57 days
Outstanding
Inventory:
Gross Inventory $ $66.6 $64.8 $47.2
Reserve $ / % $13.4/20.1% $12.3/19.0% $5.0/10.6%
------ ------ ------
Net Inventory $ $53.2 $52.5 $42.2
Net Inventory Turns 6.9x 7.2x 8.2x
Six-Month Order Backlog $104 $97 $55
Team Members 3,282 3,346 2,624
----------------------------------------------------------------------
|
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion