Black Box Corporation (NASDAQ:BBOX), a leading digital solutions
provider dedicated to helping customers design, build, manage and
secure their IT infrastructure, today reported results for the
first quarter of Fiscal 2018. Items marked with an asterisk are
non-GAAP financial measures.
1Q18 Results
- Revenues were $191.6 million, down 12% from $218.5 million for
the same period last year and down 8% from $208.1 million in the
sequential period.
- Benefit from income taxes was $4.5 million, compared to a
provision for income taxes of $2.3 million for the same period last
year and compared to a provision for income taxes of $0.6 million
in the sequential period.
- Net loss was $9.7 million, compared to $0.5 million for the
same period last year and $1.8 million in the sequential
period.
- Diluted loss per share was $0.65, compared to $0.03 for the
same period last year and $0.12 in the sequential period.
- Operating net loss* was $5.0 million, compared to operating net
income* of $2.0 million for the same period last year and compared
to operating net income* of $1.1 million in the sequential
period.
- Operating EPS* was $(0.33), compared to $0.13 for the same
period last year and $0.07 in the sequential period.
- Cash flow used for operations was $16.3 million, compared to
cash flow provided by operations of $10.9 million for the same
period last year and compared to cash flow provided by operations
of $15.2 million in the sequential period.
- We agreed with our bank group to an amendment to the Company’s
credit agreement intended to provide additional operating
flexibility for the Company to manage through the transformational
changes we are implementing.
* See the information under the caption "Non-GAAP
Financial Measures" below for a discussion regarding the usefulness
of the non-GAAP financial measures contained in this release,
definitions of those non-GAAP financial measures and
reconciliations to their most directly comparable GAAP financial
measures.
CEO Comment
E.C. Sykes, President and CEO of Black Box said,
"First quarter results are disappointing and were impacted by the
following: disruptions, now largely resolved, resulting from our
centralization, to create efficiencies, of the supply chain and
back office functions from 13 European countries into a single
site; a delay of the implementation phase of our ERP project which
required those costs to be expensed in the period rather than
deferred; and lower revenues in our Commercial Services business
due to less product shipments and less short duration
projects."
Credit Agreement Amendment
As discussed in the Form 8-K to which this press
release is furnished, the Company executed an amendment to its
credit agreement that, among other items, allows for a reduction of
the facility from $200 million to $170 million, which includes a
$50 million term loan with an amortization feature that will
require payments of $1.25 million for the first four quarters and
then $2.5 million per quarter thereafter; the elimination of the
leverage ratio through the first quarter of Fiscal 2019; the
creation of a Minimum EBITDA (as defined) covenant which gradually
increases through the first quarter of Fiscal 2019, after which, it
is eliminated; the creation of a Fixed Charge Coverage Ratio in the
second quarter of Fiscal 2019 of 1.0 to 1.0 for the second and
third quarters of Fiscal 2019 and then steps up to 1.10 to 1.0
thereafter; and a quarterly capital expenditure limitation
beginning in the second quarter of Fiscal 2018 through the first
quarter of Fiscal 2019. Additionally, the ability of the Company to
declare or pay dividends or other distributions (including stock
repurchases other than up to a limited dollar amount for tax
payments from vested equity awards) has been eliminated.
The foregoing description of the amendment to
credit agreement is qualified in its entirety by the disclosure and
documents in the Form 8-K.
Earnings Conference Call
The Company will conduct a conference call
beginning at 5:00 p.m. Eastern Time today, August 10, 2017.
E.C. Sykes, President and Chief Executive Officer, will host the
call. To listen only to the live webcast, access the event at
http://investor.blackbox.com/events.cfm. To participate in the
teleconference, dial 877-303-3145 (USA) or 253-237-1194
(International) approximately 15 minutes prior to the starting time
and ask to be connected to conference 54756160. A replay of the
audio webcast will be available at
http://investor.blackbox.com/events.cfm for a limited period
of time.
About Black Box
Black Box is a leading digital solutions provider
dedicated to helping customers design, build, manage and secure
their IT infrastructure. Black Box delivers high-value products and
services through its global presence and 3,398 team members. To
learn more, visit the Black Box Web site at
http://www.blackbox.com.
Black Box® and the Double Diamond logo are
registered trademarks of BB Technologies, Inc.
Any forward-looking statements contained in this
release are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and speak only as
of the date of this release. You can identify these forward-looking
statements by the fact that they use words such as "should,"
"anticipate," "estimate," "approximate," "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, among others, levels of business
activity and operating expenses, liquidity, expenses relating to
compliance requirements, cash flows, global economic and business
conditions, successful integration of acquisitions, the timing,
benefits and costs of restructuring programs and other initiatives,
such as our enterprise resource planning system initiatives,
successful marketing of the Company's product and services
offerings, successful implementation of the Company's integration
initiatives, successful implementation of the Company's government
contracting programs, competition, changes in foreign, political
and economic conditions, fluctuating foreign currencies compared to
the U.S. dollar, rapid changes in technologies, client preferences,
the Company's arrangements with suppliers of voice equipment and
technology, government budgetary constraints and various other
matters, many of which are beyond the Company's control. Additional
risk factors are included in the Company's Annual Report on Form
10-K for the fiscal year ended March 31, 2017 and our
quarterly reports on Form 10-Q for Fiscal 2018. We can give no
assurance that any goal, plan or target set forth in
forward-looking statements will 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 to forward-looking statements as a
result of future events or developments and caution you not to
unduly rely on any such forward-looking statements.
BLACK BOX CORPORATION |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
In millions and may not foot due to rounding |
July 1, 2017 |
March 31, 2017 |
Assets |
|
|
Cash and
cash equivalents |
$ |
10.5 |
|
$ |
14.2 |
|
Accounts
receivable, net |
113.4 |
|
128.5 |
|
Inventories, net |
25.2 |
|
25.4 |
|
Costs/estimated earnings in excess of billings on uncompleted
contracts |
75.5 |
|
71.9 |
|
Other
assets |
29.5 |
|
28.5 |
|
Total current assets |
254.0 |
|
268.6 |
|
Property,
plant and equipment, net |
28.0 |
|
29.1 |
|
Intangibles, net |
66.6 |
|
68.8 |
|
Deferred
tax asset |
58.3 |
|
53.5 |
|
Other
assets |
6.0 |
|
7.0 |
|
Total assets |
$ |
413.0 |
|
$ |
427.1 |
|
Liabilities |
|
|
Accounts
payable |
$ |
61.8 |
|
$ |
69.9 |
|
Accrued
compensation and benefits |
15.7 |
|
21.6 |
|
Deferred
revenue |
30.0 |
|
31.6 |
|
Billings
in excess of costs/estimated earnings on uncompleted contracts |
12.9 |
|
16.5 |
|
Other
liabilities |
41.0 |
|
37.9 |
|
Total current liabilities |
161.4 |
|
177.5 |
|
Long-term
debt |
99.2 |
|
88.8 |
|
Other
liabilities |
17.6 |
|
19.2 |
|
Total liabilities |
$ |
278.1 |
|
$ |
285.5 |
|
Stockholders’
equity |
|
|
Common
stock |
$ |
— |
|
$ |
— |
|
Additional paid-in capital |
508.6 |
|
506.4 |
|
Retained
earnings |
54.7 |
|
66.2 |
|
Accumulated other comprehensive income (loss) |
(12.6 |
) |
(15.5 |
) |
Treasury
stock, at cost |
(416.0 |
) |
(415.6 |
) |
Total stockholders’ equity |
$ |
134.8 |
|
$ |
141.6 |
|
Total liabilities and stockholders’ equity |
$ |
413.0 |
|
$ |
427.1 |
|
|
|
|
BLACK BOX CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
In millions, except per share amounts and may not foot due
to rounding |
1Q18 |
4Q17 |
1Q17 |
Revenues |
|
|
|
Products |
$ |
32.9 |
|
$ |
36.7 |
|
$ |
39.9 |
|
Services |
158.8 |
|
171.4 |
|
178.6 |
|
Total |
191.6 |
|
208.1 |
|
218.5 |
|
Cost of
sales |
|
|
|
Products |
19.0 |
|
21.0 |
|
22.9 |
|
Services |
120.0 |
|
128.7 |
|
127.9 |
|
Total |
139.0 |
|
149.7 |
|
150.8 |
|
Gross
profit |
52.6 |
|
58.4 |
|
67.7 |
|
Selling, general &
administrative expenses |
63.3 |
|
56.4 |
|
62.5 |
|
Intangibles
amortization |
2.2 |
|
2.3 |
|
2.5 |
|
Operating
income (loss) |
(12.9 |
) |
(0.3 |
) |
2.7 |
|
Interest expense,
net |
1.2 |
|
1.0 |
|
1.2 |
|
Other expenses
(income), net |
0.1 |
|
(0.1 |
) |
(0.3 |
) |
Income (loss) before
provision for income taxes |
(14.2 |
) |
(1.2 |
) |
1.9 |
|
Provision (benefit) for
income taxes |
(4.5 |
) |
0.6 |
|
2.3 |
|
Net income
(loss) |
$ |
(9.7 |
) |
$ |
(1.8 |
) |
$ |
(0.5 |
) |
Earnings (loss) per
common share |
|
|
|
Basic |
$ |
(0.65 |
) |
$ |
(0.12 |
) |
$ |
(0.03 |
) |
Diluted |
$ |
(0.65 |
) |
$ |
(0.12 |
) |
$ |
(0.03 |
) |
Weighted-average common
shares outstanding |
|
|
|
Basic |
15.0 |
|
15.2 |
|
15.1 |
|
Diluted |
15.0 |
|
15.2 |
|
15.1 |
|
Dividends
per share |
$ |
0.12 |
|
$ |
0.12 |
|
$ |
0.12 |
|
BLACK BOX CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
In millions and may not foot due to rounding |
1Q18 |
4Q17 |
1Q17 |
Operating
Activities |
|
|
|
Net income (loss) |
$ |
(9.7 |
) |
$ |
(1.8 |
) |
$ |
(0.5 |
) |
Adjustments to
reconcile net income (loss) to net cash provided by (used for)
operating activities |
|
|
|
Intangibles amortization |
2.2 |
|
2.3 |
|
2.5 |
|
Depreciation |
2.3 |
|
2.3 |
|
2.2 |
|
Loss
(gain) on sale of property |
(0.1 |
) |
(0.1 |
) |
(1.2 |
) |
Deferred
taxes |
(4.6 |
) |
(2.6 |
) |
2.9 |
|
Stock
compensation expense |
2.2 |
|
0.7 |
|
2.2 |
|
Provision
for obsolete inventory |
0.1 |
|
0.5 |
|
0.3 |
|
Provision
for (recovery of) doubtful accounts |
0.2 |
|
0.5 |
|
0.2 |
|
Changes in operating
assets and liabilities (net of acquisitions) |
|
|
|
Accounts
receivable |
15.2 |
|
5.0 |
|
4.6 |
|
Inventories |
0.2 |
|
0.2 |
|
2.3 |
|
Costs/estimated earnings in excess of billings on uncompleted
contracts |
(3.5 |
) |
3.4 |
|
(3.6 |
) |
All other
assets |
1.3 |
|
0.4 |
|
(1.2 |
) |
Accounts
payable |
(7.2 |
) |
10.1 |
|
0.5 |
|
Billings
in excess of costs/estimated earnings on uncompleted contracts |
(3.6 |
) |
(1.7 |
) |
0.9 |
|
All other
liabilities |
(11.2 |
) |
(4.0 |
) |
(1.2 |
) |
Net cash provided by (used for) operating
activities |
$ |
(16.3 |
) |
$ |
15.2 |
|
$ |
10.9 |
|
Investing
Activities |
|
|
|
Capital
expenditures |
$ |
(1.1 |
) |
$ |
(1.0 |
) |
$ |
(2.1 |
) |
Capital
disposals |
— |
|
0.1 |
|
1.4 |
|
Net cash provided by (used for) investing
activities |
$ |
(1.1 |
) |
$ |
(0.9 |
) |
$ |
(0.7 |
) |
Financing
Activities |
|
|
|
Proceeds
(repayments) from long-term debt |
$ |
10.2 |
|
$ |
(5.7 |
) |
$ |
(4.8 |
) |
Proceeds
(repayments) from short-term debt |
4.9 |
|
(5.0 |
) |
(4.2 |
) |
Deferred
financing costs |
— |
|
— |
|
(1.0 |
) |
Purchase
of treasury stock |
(0.4 |
) |
(2.0 |
) |
(0.5 |
) |
Payment
of dividends |
(1.8 |
) |
(1.8 |
) |
(1.7 |
) |
Increase
(decrease) in cash overdrafts |
(1.0 |
) |
0.7 |
|
0.1 |
|
Net cash provided by (used for) financing
activities |
$ |
12.0 |
|
$ |
(13.8 |
) |
$ |
(12.1 |
) |
Foreign
currency exchange impact on cash |
$ |
1.6 |
|
$ |
— |
|
$ |
(0.2 |
) |
Increase/(decrease) in cash and cash
equivalents |
$ |
(3.8 |
) |
$ |
0.4 |
|
$ |
(2.1 |
) |
Cash and cash
equivalents at beginning of period |
14.2 |
|
13.8 |
|
23.5 |
|
Cash and cash
equivalents at end of period |
$ |
10.5 |
|
$ |
14.2 |
|
$ |
21.4 |
|
|
|
|
|
Non-GAAP Financial Measures
As a supplement to United States Generally Accepted
Accounting Principles ("GAAP"), the Company provides non-GAAP
financial measures such as operating income before provision for
income taxes ("EBIT"), operating net income or operating net loss,
operating earnings per share ("EPS"), revenues excluding foreign
currency, adjusted operating income, Earnings Before Interest,
Taxes, Depreciation and Amortization ("EBITDA"), Operating EBITDA
and free cash flow to illustrate the Company's operational
performance. These non-GAAP financial measures are not prepared in
accordance with GAAP, are not reported by all of the Company's
competitors and may not be directly comparable to similarly-titled
measures of the Company's competitors due to potential differences
in the exact method of calculation. However, each of the amounts
included in the calculation of non-GAAP financial measures are
computed in accordance with GAAP. See below for reconciliations to
the most directly comparable GAAP financial measures.
Management uses these non-GAAP financial measures
(a) to evaluate the Company's historical and prospective financial
performance as well as its performance relative to its competitors,
(b) to set internal sales targets and associated operating budgets,
(c) to allocate resources and (d) to measure operational
profitability. Management uses similar non-GAAP measures as an
important factor in determining variable compensation for
Management and its team members.
Non-GAAP financial measures are not in accordance
with, or an alternative for, GAAP financial measures. The Company's
non-GAAP financial measures are not meant to be considered in
isolation or as a substitute for comparable GAAP financial
measures, and should be read only in conjunction with the Company's
consolidated financial statements prepared in accordance with
GAAP.
Operating EBIT, operating net income and
operating EPS
Management believes that operating EBIT, defined by
the Company as net income (loss) plus provision (benefit) for
income taxes and adjustments, operating net income, defined by the
Company as operating EBIT less operational income taxes, and
operating EPS, defined as operating net income divided by weighted
average common shares outstanding (diluted), provide investors
additional important information to enable them to assess, in the
way Management assesses, the Company's current and future
operations. Adjustments include intangibles amortization, which is
a non-cash charge, and restructuring expense and gains/losses on
sales of facilities, each of which are cash charges.
A reconciliation of Net income (loss) to operating
EBIT and Operating net income (loss) is presented below:
In millions and may not foot due to rounding |
1Q18 |
4Q17 |
1Q17 |
Net income
(loss) |
$ |
(9.7 |
) |
$ |
(1.8 |
) |
$ |
(0.5 |
) |
Provision (benefit) for
income taxes |
(4.5 |
) |
0.6 |
|
2.3 |
|
Effective tax rate |
31.6 |
% |
(53.7 |
)% |
125.6 |
% |
Income (loss)
before provision for income taxes |
$ |
(14.2 |
) |
$ |
(1.2 |
) |
$ |
1.9 |
|
|
|
|
|
Adjustments |
|
|
|
Intangibles amortization |
$ |
2.2 |
|
$ |
2.3 |
|
$ |
2.5 |
|
Restructuring expense |
4.3 |
|
0.6 |
|
— |
|
Loss
(gain) on sale of facility |
— |
|
— |
|
(1.2 |
) |
Total pre-tax
adjustments |
$ |
6.6 |
|
$ |
2.9 |
|
$ |
1.3 |
|
|
|
|
|
Operating
EBIT |
$ |
(7.7 |
) |
$ |
1.7 |
|
$ |
3.1 |
|
Operational effective
tax rate |
35.0 |
% |
35.0 |
% |
35.0 |
% |
Operational income
taxes (1) |
(2.7 |
) |
0.6 |
|
1.1 |
|
Operating net income (loss) |
$ |
(5.0 |
) |
$ |
1.1 |
|
$ |
2.0 |
|
(1) The effective tax rate used to determine
operational income taxes is based on the Company's projected
full-year ordinary income tax expense and the projected full-year
impact of certain discreet tax items.
A reconciliation of Diluted earnings (loss) per
share to operating EPS is presented below:
|
1Q18 |
4Q17 |
1Q17 |
Diluted
EPS |
$ |
(0.65 |
) |
$ |
(0.12 |
) |
$ |
(0.03 |
) |
EPS impact
* |
0.32 |
|
0.19 |
|
0.16 |
|
Operating EPS |
$ |
(0.33 |
) |
$ |
0.07 |
|
$ |
0.13 |
|
* EPS impact is the result of excluding the
provision for income taxes and the adjustments and utilizing an
operational effective tax rate.
Revenues excluding foreign
currency
Management is presented with and reviews revenues
which exclude foreign currency and enable an investor to assess, in
the way Management assesses, revenues from its core operations.
Information on quarterly revenues excluding foreign
currency compared to the same period last year is presented
below:
In millions and may not foot due to rounding |
1Q18 |
1Q17 |
% Change |
Revenues |
$ |
191.6 |
|
$ |
218.5 |
|
(12 |
)% |
Foreign currency impact
- North America Products |
— |
|
— |
|
|
|
Foreign currency impact
- North America Services |
0.1 |
|
— |
|
|
|
Foreign currency impact
- International Products |
0.5 |
|
— |
|
|
|
Foreign currency impact
- International Services |
0.5 |
|
— |
|
|
|
Revenues (excluding foreign currency) |
$ |
192.7 |
|
$ |
218.5 |
|
(12 |
)% |
Information on quarterly revenues excluding
foreign currency compared to the sequential quarter is presented
below:
In millions and may not foot due to rounding |
1Q18 |
4Q17 |
% Change |
Revenues |
$ |
191.6 |
|
$ |
208.1 |
|
(8 |
)% |
Foreign currency impact
- North America Products |
— |
|
— |
|
|
|
Foreign currency impact
- North America Services |
— |
|
— |
|
|
|
Foreign currency impact
- International Products |
(0.4 |
) |
— |
|
|
|
Foreign currency impact
- International Services |
(0.1 |
) |
— |
|
|
|
Revenues (excluding foreign currency) |
$ |
191.1 |
|
$ |
208.1 |
|
(8 |
)% |
Segment Information
Management is presented with and reviews Revenues,
Gross profit, Operating income (loss) and Adjusted operating income
by segment. Management believes that Adjusted operating income,
defined by the Company as Operating income (loss) plus adjustments,
provides investors additional important information to enable them
to assess, in the way Management assesses, the Company's current
and future operations. Adjustments include intangibles
amortization, which is a non-cash charge, and restructuring expense
and gains/losses on sales of facilities, each of which are cash
charges.
A reconciliation of Operating income (loss) to
Adjusted operating income (by segment) is presented below:
|
1Q18 |
4Q17 |
1Q17 |
In millions and may not foot due to rounding |
$ |
% of Rev |
$ |
% of Rev |
$ |
% of Rev |
Revenues |
|
|
|
|
|
|
North
America Products |
$ |
17.3 |
|
|
$ |
16.9 |
|
|
$ |
19.1 |
|
International Products |
|
15.6 |
|
|
|
19.7 |
|
|
|
20.8 |
|
Products |
$ |
32.9 |
|
|
$ |
36.7 |
|
|
$ |
39.9 |
|
North
America Services |
$ |
152.6 |
|
|
$ |
163.9 |
|
|
$ |
171.7 |
|
International Services |
|
6.1 |
|
|
|
7.5 |
|
|
|
6.9 |
|
Services |
$ |
158.8 |
|
|
$ |
171.4 |
|
|
$ |
178.6 |
|
Total |
$ |
191.6 |
|
|
$ |
208.1 |
|
|
$ |
218.5 |
|
Gross
profit |
|
|
|
|
|
|
North
America Products |
$ |
7.8 |
|
45.1 |
% |
$ |
7.9 |
|
46.5 |
% |
$ |
8.9 |
46.8 |
% |
International Products |
|
6.1 |
|
38.9 |
% |
|
7.8 |
|
39.5 |
% |
|
8.0 |
38.5 |
% |
Products |
$ |
13.9 |
|
42.1 |
% |
$ |
15.7 |
|
42.7 |
% |
$ |
16.9 |
42.5 |
% |
North
America Services |
$ |
37.5 |
|
24.6 |
% |
$ |
41.1 |
|
25.1 |
% |
$ |
49.1 |
28.6 |
% |
International Services |
|
1.2 |
|
19.8 |
% |
|
1.6 |
|
21.3 |
% |
|
1.6 |
22.8 |
% |
Services |
$ |
38.7 |
|
24.4 |
% |
$ |
42.7 |
|
24.9 |
% |
$ |
50.7 |
28.4 |
% |
Total |
$ |
52.6 |
|
27.4 |
% |
$ |
58.4 |
|
28.1 |
% |
$ |
67.7 |
31.0 |
% |
Operating
income (loss) |
|
|
|
|
|
|
North
America Products |
$ |
(1.5 |
) |
(8.5 |
)% |
$ |
1.7 |
|
9.8 |
% |
$ |
0.9 |
4.9 |
% |
International Products |
|
(3.7 |
) |
(23.9 |
)% |
|
(1.5 |
) |
(7.5 |
)% |
|
0.3 |
1.6 |
% |
Products |
$ |
(5.2 |
) |
(15.9 |
)% |
$ |
0.2 |
|
0.4 |
% |
$ |
1.3 |
3.2 |
% |
North
America Services |
$ |
(7.4 |
) |
(4.8 |
)% |
$ |
(0.7 |
) |
(0.4 |
)% |
$ |
1.1 |
0.7 |
% |
International Services |
|
(0.3 |
) |
(5.3 |
)% |
|
0.3 |
|
3.8 |
% |
|
0.3 |
4.4 |
% |
Services |
$ |
(7.7 |
) |
(4.8 |
)% |
$ |
(0.4 |
) |
(0.2 |
)% |
$ |
1.4 |
0.8 |
% |
Total |
$ |
(12.9 |
) |
(6.7 |
)% |
$ |
(0.3 |
) |
(0.1 |
)% |
$ |
2.7 |
1.2 |
% |
Adjustments |
|
|
|
|
|
|
North
America Products |
$ |
1.3 |
|
|
$ |
0.4 |
|
|
$ |
— |
|
International Products |
|
1.8 |
|
|
|
0.1 |
|
|
|
0.1 |
|
Products |
$ |
3.1 |
|
|
$ |
0.5 |
|
|
$ |
0.1 |
|
North
America Services |
$ |
3.4 |
|
|
$ |
2.3 |
|
|
$ |
1.2 |
|
International Services |
|
— |
|
|
|
— |
|
|
|
— |
|
Services |
$ |
3.4 |
|
|
$ |
2.3 |
|
|
$ |
1.2 |
|
Total |
$ |
6.6 |
|
|
$ |
2.9 |
|
|
$ |
1.3 |
|
Adjusted operating income |
|
|
|
|
|
North
America Products |
$ |
(0.2 |
) |
(1.0 |
)% |
$ |
2.1 |
|
12.2 |
% |
$ |
0.9 |
4.9 |
% |
International Products |
|
(1.9 |
) |
(12.3 |
)% |
|
(1.4 |
) |
(6.8 |
)% |
|
0.4 |
2.2 |
% |
Products |
$ |
(2.1 |
) |
(6.3 |
)% |
$ |
0.7 |
|
1.9 |
% |
$ |
1.4 |
3.5 |
% |
North
America Services |
$ |
(4.0 |
) |
(2.6 |
)% |
$ |
1.6 |
|
1.0 |
% |
$ |
2.3 |
1.3 |
% |
International Services |
|
(0.3 |
) |
(4.9 |
)% |
|
0.3 |
|
3.8 |
% |
|
0.3 |
4.4 |
% |
Services |
$ |
(4.3 |
) |
(2.7 |
)% |
$ |
1.9 |
|
1.1 |
% |
$ |
2.6 |
1.5 |
% |
Total |
$ |
(6.3 |
) |
(3.3 |
)% |
$ |
2.6 |
|
1.3 |
% |
$ |
4.0 |
1.8 |
% |
EBITDA and Operating EBITDA
Management believes that EBITDA, defined as Net
income (loss) plus provision (benefit) for income taxes, interest,
depreciation and amortization, is a widely-accepted measure of
profitability that may be used to measure the Company's ability to
service its debt. Operating EBITDA, defined as EBITDA plus stock
compensation expense, accounts receivable impairment loss,
inventory impairment loss, and asset impairment loss (consisting of
fixed assets, indefinite-lived intangible assets and goodwill) may
also be used to measure the Company's ability to service its
debt.
A reconciliation of Net income (loss) to EBITDA and
Operating EBITDA is presented below:
In millions and may not foot due to rounding |
1Q18 |
4Q17 |
1Q17 |
Net income
(loss) |
$ |
(9.7 |
) |
$ |
(1.8 |
) |
$ |
(0.5 |
) |
Provision
(benefit) for income taxes |
(4.5 |
) |
0.6 |
|
2.3 |
|
Interest
expense, net |
1.2 |
|
1.0 |
|
1.2 |
|
Intangibles amortization |
2.2 |
|
2.3 |
|
2.5 |
|
Depreciation |
2.3 |
|
2.3 |
|
2.2 |
|
EBITDA |
$ |
(8.5 |
) |
$ |
4.5 |
|
$ |
7.8 |
|
Stock
compensation expense |
2.2 |
|
0.7 |
|
2.2 |
|
Operating EBITDA |
$ |
(6.3 |
) |
$ |
5.2 |
|
$ |
10.0 |
|
Free cash flow
Management believes that free cash flow, defined by
the Company as Net cash provided by (used for) operating activities
less net capital expenditures, plus or minus Foreign currency
exchange impact on cash, plus Proceeds from stock option exercises,
is an important measurement of liquidity as it represents the total
cash available to the Company.
A reconciliation of Net cash provided by (used for)
operating activities to free cash flow is presented below:
In millions and may not foot due to rounding |
1Q18 |
4Q17 |
1Q17 |
Net cash
provided by (used for) operating activities |
$ |
(16.3 |
) |
$ |
15.2 |
|
$ |
10.9 |
|
Net
capital expenditures |
(1.1 |
) |
(0.9 |
) |
(0.7 |
) |
Foreign
currency exchange impact on cash |
1.6 |
|
— |
|
(0.2 |
) |
Free cash flow
before stock option exercises |
$ |
(15.8 |
) |
$ |
14.3 |
|
$ |
9.9 |
|
Proceeds
from the exercise of stock options |
— |
|
— |
|
— |
|
Free cash flow |
$ |
(15.8 |
) |
$ |
14.3 |
|
$ |
9.9 |
|
Significant Balance Sheet ratios and Other
Information
Information on certain balance sheet ratios,
backlog and headcount is presented below:
Dollars In millions |
1Q18 |
4Q17 |
1Q17 |
Days sales
outstanding |
|
48 days |
|
|
46 days |
|
|
53 days |
|
Aggregate days sales
outstanding |
|
79
days |
|
|
72
days |
|
|
77
days |
|
Inventory turns |
|
26.5x |
|
|
23.9x |
|
|
13.2x |
|
Six-month order
backlog |
$ |
151.7 |
|
$ |
153.2 |
|
$ |
173.8 |
|
Total backlog |
$ |
283.4 |
|
$ |
306.6 |
|
$ |
308.3 |
|
Headcount |
3,398 |
|
3,488 |
|
3,566 |
|
Net
debt* |
$ |
88.7 |
|
$ |
74.5 |
|
$ |
93.5 |
|
|
* Net debt is defined by the Company as Long-term debt less Cash
and cash equivalents.
Contact
Black Box Corporation
David J. Russo
Senior Vice President, Chief Financial Officer and Treasurer
Phone: (724) 873-6788
Email: investors@blackbox.com
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