Black Box Corporation Reports Third Quarter of Fiscal 2013 Results

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Black Box Corporation Reports Third Quarter of Fiscal 2013 Results

PITTSBURGH--(BUSINESS WIRE)-- Black Box Corporation (NAS: BBOX) , a leading communications system integrator dedicated to designing, sourcing, implementing and maintaining today's complex communications solutions, today reported results for the third quarter of Fiscal 2013.

Third quarter of Fiscal 2013 diluted earnings per share was 52¢ on net income of $8.5 million or 3.4% of revenues compared to diluted loss per share of $16.12 on net loss of $283.4 million or (102.7)% of revenues for the same quarter last year. Included in our diluted earnings per share for the third quarter of Fiscal 2013 and the third quarter of Fiscal 2012 was a loss ($2.7 million, pre-tax and $1.7 million, after-tax) resulting from the expected divestiture of our non-controlling interest in Genesis Networks Integration Services, LLC and the previously disclosed goodwill impairment charge ($317.8 million, pre-tax and $296.0 million, after-tax), respectively. On a sequential quarter comparison basis, second quarter of Fiscal 2013 diluted earnings per share was 43¢ on net income of $7.1 million or 2.7% of revenues. Excluding provision (benefit) for income taxes and reconciling items (which are identified below) and utilizing an operational effective tax rate (as described below), operating earnings per share (which is a non-GAAP term and is defined below) for the third quarter of Fiscal 2013 was 79¢ on operating net income (which is a non-GAAP term and is defined below) of $13.0 million or 5.2% of revenues compared to operating earnings per share of 85¢ on operating net income of $15.0 million or 5.4% of revenues for the same quarter last year. Third quarter of Fiscal 2013 pre-tax reconciling items, including the divestiture charge noted above, were $7.3 million compared to $321.8 million, which included the goodwill impairment loss, for the same quarter last year. See below for further discussion regarding Management's use of non-GAAP accounting measurements and a detailed presentation of the Company's pre-tax reconciling items for the periods presented above.


Third quarter of Fiscal 2013 total revenues were $252 million, a decrease of 9% from $276 million for the same quarter last year. On a sequential quarter comparison basis, second quarter of Fiscal 2013 total revenues were $260 million.

Third quarter of Fiscal 2013 cash provided by operating activities was $16 million or 191% of net income, compared to cash provided by operating activities of $30.6 million or (11)% of net loss for the same quarter last year. Third quarter of Fiscal 2013 free cash flow (which is a non-GAAP term and is defined below) was $15 million compared to $27 million for the same quarter last year. On a sequential quarter comparison basis, second quarter of Fiscal 2013 cash provided by operating activities was $18 million or 250% of net income and free cash flow was $17 million. During the third quarter of Fiscal 2013, Black Box invested $6 million to repurchase common stock and $1 million to pay dividends.Management believes that free cash flow, defined by the Company as cash provided by (used for) operating activities less net capital expenditures, plus proceeds from stock 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.

For the nine months ended December 29, 2012, diluted earnings per share was $1.28 on net income of $21.6 million or 2.8% of revenues compared to diluted loss per share of $14.54 on net loss of $259.0 million or (31.1)% of revenues for the same period last year. Excluding provision (benefit) for income taxes and reconciling items and utilizing an operational effective tax rate, operating earnings per share for the nine months ended December 29, 2012 was $1.99 on operating net income of $33.6 million or 4.4% of revenues compared to operating earnings per share of $2.38 on operating net income of $42.6 million or 5.1% of revenues for the same period last year. Pre-tax reconciling items for the nine months ended December 29, 2012 were $19.4 million compared to $326.4 million for the same period last year.

For the nine months ended December 29, 2012, total revenues were $760 million, a decrease of 9% from $832 million for the same period last year.

For the nine months ended December 29, 2012, cash provided by operating activities was $31 million or 142% of net income, compared to cash provided by operating activities of $44 million or (17)% of net income for the same period last year. Free cash flow for the nine months ended December 29, 2012 was $27 million compared to $36 million for the same period last year. For the nine months ended December 29, 2012, Black Box invested $33 million to repurchase common stock and $4 million to pay dividends.

The Company's six-month order backlog was $188 million at December 29, 2012, compared to $208 million for the same quarter last year. On a sequential quarter-end comparison basis, the Company's six-month order backlog was $203 million at September 29, 2012.

For Fiscal 2013, the Company is targeting reported revenues of approximately $990 million to $995 million and corresponding operating earnings per share in the range of $2.50 to $2.55. Included in these projections is an effective tax rate of 38.0%. For the fourth quarter of Fiscal 2013, the Company is targeting reported revenues of approximately $230 million to $235 million and corresponding operating earnings per share in the range of 51¢ to 56¢. These targets exclude acquisition-related expense, restructuring and the impact of changes in the fair market value of the Company's interest-rate swaps, and are before any new mergers and acquisition activity that has not been announced.

Commenting on the third quarter of Fiscal 2013 results, Terry Blakemore, Chief Executive Officer, said, "I am pleased with our operating results from the third quarter of Fiscal 2013. Our earnings and positive cash flow reflect the leverage in our financial and operating model created by our continued focus on the efficient execution of our business operations."

Michael McAndrew, President and Chief Operating Officer, said, "At Black Box, we know that we must continue to execute, adapt and grow to create long-term value for our clients and shareholders. We are actively transitioning our business to align with the rapid evolution of enterprise communications. Our transition will require continued strategic investment in new solutions and leverageable resources. I am confident that expanding our portfolio of product and service offerings while deepening our centralized expertise will position Black Box to best serve our clients as they optimize their communications investments."

Black Box also announced that Ronald Basso will join the Company as Executive Vice President of Business Development and General Counsel. Mr. Basso previously served as the company's lead engagement partner from the law firm of Buchanan Ingersoll & Rooney PC.

The Company will conduct a conference call beginning at 5:00 p.m. Eastern Daylight Time today, January 29, 2013. Terry Blakemore, Chief Executive Officer, will host the call. To participate in the call, please dial 612-332-0107 approximately 15 minutes prior to the starting time 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 277403. A live, listen-only audio webcast of the call will be available through a link on the Investor Relations page of the Company's Web site at http://www.blackbox.com. A webcast replay of the call will also be archived on Black Box's Web site for a limited period of time following the conference call.

Black Box is a leading communications system integrator dedicated to designing, sourcing, implementing and maintaining today's complex communications solutions. Black Box services more than 175,000 clients in approximately 150 countries with approximately 200 offices throughout the world. 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 levels of business activity and operating expenses, expenses relating to corporate compliance requirements, cash flows, global economic and business conditions, successful integration of acquisitions, the timing and costs of restructuring programs, successful marketing of the Company's product and services offerings, successful implementation of the Company's M&A program, including identifying appropriate targets, consummating transactions and successfully integrating the businesses, successful implementation of our 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, 2012. 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.

      
 

BLACK BOX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

 
In thousands, except par value    December 29, 2012  March 31, 2012
Assets
Cash and cash equivalents$29,469$22,444
Accounts receivable, net158,568163,888
Inventories, net56,26556,956
Costs/estimated earnings in excess of billings on uncompleted contracts110,36587,634
Other assets23,248   22,678 
Total current assets377,915353,600
Property, plant and equipment, net27,10127,109
Goodwill, net346,546346,438
Intangibles, net113,982126,541
Other assets28,141   34,335 
Total assets$893,685   $888,023 
Liabilities
Accounts payable$74,672$71,095
Accrued compensation and benefits23,85831,151
Deferred revenue34,36435,601
Billings in excess of costs/estimated earnings on uncompleted contracts18,20214,315
Income taxes4,0872,574
Other liabilities38,420   32,697 
Total current liabilities193,603187,433
Long-term debt191,803179,621
Other liabilities23,859   26,585 
Total liabilities$409,265$393,639
Stockholders' equity
Common stock$26$26
Additional paid-in capital484,842478,726
Retained earnings364,843347,242
Accumulated other comprehensive income6,6037,262
Treasury stock, at cost(371,894)  (338,872)
Total stockholders' equity$484,420   $494,384 
Total liabilities and stockholders' equity$893,685   $888,023 
 
      
 

BLACK BOX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 
Three-months endedNine-months ended
December 29 and 31  December 29 and 31
In thousands, except per share amounts    2012 2011  2012 2011
Revenues  
Products$46,854$51,379$137,492$149,427
On-Site services205,235  224,560   622,595  682,109 
Total252,089275,939760,087831,536
Cost of sales
Products26,73529,08877,01283,015
On-Site services143,622  158,538   442,015  484,761 
Total170,357187,626519,027567,776
Gross profit81,73288,313241,060263,760
Selling, general & administrative expenses60,54262,644187,088192,544
Goodwill impairment loss317,797317,797
Intangibles amortization3,478  3,249   10,416  9,484 
Operating income (loss)17,712(295,377)43,556(256,065)
Interest expense (income), net1,1331,8564,9563,690
Other expenses (income), net2,839  311   3,788  876 
Income (loss) before provision (benefit) for income taxes13,740(297,544)34,812(260,631)
Provision (benefit) for income taxes5,222  (14,101)  13,229  (1,655)
Net income (loss)$8,518  $(283,443)  $21,583  $(258,976)
Earnings (loss) per common share
Basic$0.52  $(16.12)  $1.29  $(14.54)
Diluted$0.52  $(16.12)  $1.28  $(14.54)
Weighted-average common shares outstanding
Basic16,412  17,581   16,783  17,806 
Diluted16,525  17,581   16,863  17,806 
Dividends per share    $0.08  $0.07   $0.24  $0.21 
 
      
 

BLACK BOX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 
Three-months endedNine-months ended
December 29 and 31  December 29 and 31
In thousands    2012 2011  2012 2011
Operating Activities  
Net income (loss)$8,518$(283,443)$21,583$(258,976)
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities
Intangibles amortization and depreciation4,7774,54714,42713,581
Loss (gain) on sale of property(41)(24) Read Full Story

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