Loading

Tuesday, February 01, 2005


Black Box Corporation Reports Third Quarter and YTD Fiscal 2005 Results


Declares 6¢ Quarterly Cash Dividend


PITTSBURGH, PENNSYLVANIA, February 1, 2005 — Black Box Corporation (NASDAQ:BBOX) today reported for the third quarter ended January 1, 2005 diluted earnings per share of 52¢ compared to 66¢ last year. Net income for the third quarter was $9.2 million or 7.3% of revenues, compared to $12.2 million or 9.2% of revenues last year. On a sequential comparison basis, second quarter diluted earnings per share were 60¢ with corresponding net income of $10.6 million or 8.4% of revenues. Total revenues for the third quarter were $127 million, down 5% from $133 million for the same period last year, and comparable to sequential second quarter revenues of $127 million.

Third quarter cash provided by operating activities was approximately $14 million or 148% of net income, compared to $16 million or 128% of net income for the same period last year. On a sequential comparison basis, second quarter cash provided by operating activities was $11 million. Black Box utilized its third quarter cash provided by operating activities of $14 million to make a dividend payment of $1 million, reduce debt by $12 million and increase cash on hand by $1 million.

For the nine months ended January 1, 2005, diluted earnings per share were $1.66 compared to $1.90 for the same period last year, down 13%. Corresponding net income for the nine-month period was $30 million or 7.9% of revenues, compared to $36 million or 9.1% of revenues for the same period last year.

Total nine-month revenues were $378 million, down 3% from $391 million for the same period last year.

Cash provided by operating activities for the nine-month period was $34 million or 115% of net income, compared to $47 million or 130% of net income last year. Black Box utilized the nine-month cash provided by operating activities of $34 million, together with $7 million from other sources of cash, to make dividend payments of $3 million and repurchase $38 million of its Common Stock.

The Company’s 6-month order backlog was $54 million at January 1, 2005 compared to $55 million at the end of the second quarter.

Commenting on the third quarter results, Fred C. Young, Chief Executive Officer, said, “Tactically, total revenues of $127 million were comparable with our last sequential quarter. We would have liked to have delivered $2 to $3 million more top-line, particularly in our Hotline Services, to better match the current cost structure. This is affecting our short-term profits as we are striving to achieve a revenue lift in this specific area and support the recent Norstan merger over the next couple of quarters. In addition, our worldwide Sarbanes-Oxley 404 implementation costs in the quarter were $1.3 million or about 6 cents per share. The bulk of these costs should subside by the end of June 2005. Operating cash flow remained strong at approximately $14 million.

“Strategically, we are very excited about the Norstan merger completed on January 25, 2005. This merger will increase our immediate revenues by almost 40%. Our goal over the next couple of years is to leverage this revenue such that we achieve a corresponding increase in profits and cash flow. Scott G. Christian, previously the CEO of Norstan, and his team will lead Black Box’s newest Voice Services Group based out of Minnetonka, MN (a suburb of Minneapolis). We are currently focused on integrating the two companies as quickly as possible. As part of this effort, we will incur some one-time charges in our fiscal fourth quarter ending March 31, 2005.

“Through the success of this integration, our expectations remain high for significant incremental marketing, operational and financial benefits. Beginning with our new fiscal year as of April 1, 2005, we expect quarterly combined revenues to be in a range of $174 to $177 million, gross profit to be in the range of 39% to 40% of revenues and operating expenses to be in the range of 28% to 29% of revenues. Over time, we will look to increase our overall gross margins by 1% to 2% while reducing operating expenses by 1% to 2%.

“In summary, our goals are straightforward: successfully execute the Norstan integration plan, drive organic growth by aggressively cross-selling all three of the Black Box Technical Services and selectively look for additional M&A opportunities that complement our overall long-term growth strategy.”

The Company also announced today that its Board of Directors has declared a quarterly cash dividend of 6¢ per share of common stock. The dividend was declared on all outstanding shares of Black Box’s common stock and will be payable on April 15, 2005 to stockholders of record at the close of business on March 31, 2005. Black Box will pay the dividend through its transfer agent, American Stock Transfer & Trust Company.

The Company will conduct a conference call beginning at 5:30 p.m. Eastern Standard Time today, February 1, 2005. Fred C. Young, Chief Executive Officer, will host the call. To participate in the call, please dial 612-332-0802 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 764491.

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. Forward-looking statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. These include levels of business activity and operating expenses, expenses relating to corporate compliance requirements, cash flows, global economic conditions and successful integration of the Norstan business. Additional risk factors are included in the Company’s Annual Report on Form 10-K. Any information which is not historical in nature constitutes such forward-looking statements and speaks only as of the date of this release.

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 122 offices throughout the world.

Black Box and the Double Diamond logo are registered trademarks of BB Technologies, Inc.

BLACK BOX CORPORATION
CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

Three months ended

 

Nine months ended

 

In thousands, except per share

January 1,

 

December 28,

 

January 1,

 

December 28,

 

Unaudited

2005

 

2003

 

2005

2003

 

Revenues

$ 126,896

 

$ 133,067

 

$ 377,846

 

$ 390,682

 

Cost of sales

75,878

 

78,426

 

222,633

 

228,719

 

Gross profit

51,018

 

54,641

 

155,213

 

161,963

 

Selling, general & administrative exp

36,762

 

34,953

 

107,886

 

104,474

 

Intangibles amortization

59

 

64

 

187

 

198

 

Operating income

14,197

 

19,624

 

47,140

 

57,291

Interest expense, net

519

 

498

 

1,436

 

1,358

 

Other expenses, net of income

46

 

75

 

93

 

91

 

Income before income taxes

13,632

 

19,051

 

45,611

 

55,842

Provision for income taxes

4,383

 

6,858

 

15,736

 

20,102

 

Net income

$ 9,249

 

$ 12,193

 

$ 29,875

 

$ 35,740

 

 

 

 

 

 

 

 

Basic earnings per common share

$ 0.54

 

$ 0.68

 

$ 1.71

 

$ 1.96

 

 

 

 

 

 

 

 

Diluted earnings per common share

$ 0.52

 

$ 0.66

 

$ 1.66

 

$ 1.90

 

 

 

 

 

 

 

 

Weighted average common shares

17,293

 

17,954

 

17,499

 

18,258

 

 

 

 

 

 

 

 

Weighted average common & common equivalent shares outstanding

17,694

 

18,571

 

17,949

 

18,792

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



BLACK BOX CORPORATION

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

In thousands

January 1,

 

March 31,

Unaudited

2005

 

2004

Assets

 

 

 

Cash and cash equivalents

$ 10,947

 

$ 9,306

Accounts receivable, net

98,578

 

97,203

Inventories, net

43,229

 

40,162

Costs and estimated earnings in excess

 

of billings on uncompleted contracts

18,369

 

13,763

Deferred tax asset

2,554

 

4,131

Other current assets

10,663

 

9,610

 

Total current assets

184,340

 

174,175

 

Property, plant and equipment, net

26,951

 

29,269

Goodwill, net

387,036

 

380,769

Intangibles, net

29,508

 

29,546

Other assets

3,317

 

2,530

 

Total assets

$ 631,152

 

$ 616,289

 

 

 

 

 

Liabilities

 

 

 

Current debt

$ 216

 

$ 1,061

Accounts payable

30,805

 

30,709

Billings in excess of costs and estimated

 

 

 

earnings on uncompleted contracts

5,737

 

5,665

Accrued compensation and benefits

6,956

 

6,836

Other accrued expenses

16,636

 

16,778

Accrued income taxes

3,634

 

3,695

 

Total current liabilities

63,984

 

64,744

 

Long-term debt

40,451

 

35,177

Deferred taxes

11,248

 

11,050

Other liabilities

77

 

414

Stockholders' Equity

 

 

 

Common stock

24

 

23

Additional paid-in capital

335,598

 

324,219

Retained earnings

429,606

 

402,675

Treasury stock, at cost

(277,470)

 

(239,885)

Accumulated other comprehensive gain

27,634

 

17,872

 

Total stockholders' equity

515,392

 

504,904

 

Total liabilities and stockholders' equity

$ 631,152

 

$ 616,289



BLACK BOX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

In thousands

January 1,

 

December 28,

 

January 1,

 

December 28,

 

 

Unaudited

2005

 

2003

 

2005

 

2003

Operating Activities

 

 

 

 

 

 

 

 

Net income

$ 9,249

 

$ 12,193

 

$ 29,875

 

$ 35,740

 

Adjustments to reconcile net income to cash

 

 

 

 

 

 

 

 

provided by operating activities:

 

 

 

 

 

 

 

 

 

Intangibles amortization

59

 

64

 

187

 

198

 

 

Depreciation

1,658

 

1,606

 

4,370

 

4,824

 

 

Gain on disposal of assets

--

 

--

 

--

 

(301)

 

 

Deferred tax provision

1,237

 

3,526

 

1,775

 

2,274

 

Stock compensation expense

--

 

--

 

680

 

--

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Account receivable, net

(6,951)

 

(2,073)

 

1,153

 

3,929

 

 

Inventories, net

(314)

 

(625)

 

(2,412)

 

(960)

 

 

Other current assets

4,413

 

1,055

 

888

 

7,080

 

 

Accounts payable and accrued liabilities

4,336

 

(146)

 

(2,111)

 

(6,192)

 

Net cash provided by operating activities

$ 13,687

 

$ 15,600

 

$ 34,405

 

$ 46,592

Investing Activities

 

 

 

 

 

 

 

 

 

Capital expenditures, net

(908)

 

$ (435)

 

$ (1,849)

 

$ 28

 

 

Payments related to acquisitions,

 

 

 

 

 

 

 

 

 

net of cash acquired

(151)

 

(252)

 

(498)

 

(1,261)

 

Net cash used in investing activities

$ (1,059)

 

$ (687)

 

$ (2,347)

 

$ (1,233)

Financing Activities

 

 

 

 

 

 

 

 

 

(Repayments)/proceeds on borrowings, net

$ (11,940)

 

$ (953)

 

$ 4,036

 

$(2,959)

 

 

Proceeds from exercise of options

1,625

 

3,229

 

7,310

 

6,014

 

 

Payment of dividends

(1,035)

 

(913)

 

(2,809)

 

(2,737)

 

 

Deferred financing costs

--

 

-

 

(235)

 

-

 

 

Purchase of treasury stock

(11)

 

(15,675)

 

(37,585)

 

(52,354)

 

Net cash used in financing activities

$(11,361)

 

$(14,312)

 

$(29,283)

 

$(52,036)

Foreign currency exchange impact on cash

$ (33)

 

$ 901

 

$ (1,134)

 

$ 2,558

Net Increase/(decrease) in cash & cash equivalents

$ 1,234

 

$ 1,502

 

$ 1,641

 

$ (4,119)

Cash & cash equivalents at beginning of period

9,713

 

8,422

 

9,306

 

14,043

Cash & cash equivalents at end of period

$ 10,947

 

$ 9,924

 

$ 10,947

 

$ 9,924

RECONCILIATIONS:

In addition to reported results under U.S. GAAP for the fiscal periods, the following financial highlights table also includes, where appropriate, a reconciliation of free cash flow (which is a non-GAAP measure), 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:

 

3Q05

3Q04

3Q05YTD

3Q04YTD

Cash provided by operating activities

$ 13,687

$ 15,600

$ 34,405

$ 46,592

Plus or (minus):

 

 

 

 

Net capital expenditures/disposals

(908)

(435)

(1,849)

28

Proceeds from stock option exercises

1,625

3,229

7,310

6,014

Foreign currency exchange impact

on cash

(33)

901

 

(1,134)

 

2,558

Free cash flow

$ 14,371

$ 19,295

$ 38,732

$ 55,19

 

SUPPLEMENTAL INFORMATION:

Additionally, the following supplemental information is being provided for comparisons of third quarter ended January 1, 2005 reported results to this year’s second quarter and prior year’s third quarter. All dollar amounts are in thousands unless noted otherwise.

Information on revenues and operating income by geography is presented below.

 

3Q05

2Q05

3Q04

3Q05YTD

3Q04YTD

Revenues:

 

 

 

 

 

North America

$ 78,642

$ 84,792

$ 84,665

$ 242,966

$ 259,555

Europe

38,947

32,830

38,309

107,337

103,944

All Other

9,307

8,973

10,093

27,543

27,183

Total

$ 126,896

$ 126,595

$ 133,067

$ 377,846

$ 390,682

 

 

 

 

 

 

Operating Income:

 

 

 

 

 

North America

$ 8,345

$ 10,835

$ 10,900

$ 27,090

$ 34,595

% of North America revenues

10.6%

12.8%

12.9%

11.1%

13.3%

Europe

$ 4,016

$ 3,697

$ 6,325

$ 13,365

$ 16,278

% of Europe revenues

10.3%

11.3%

16.5%

12.5%

15.7%

All Other

$ 1,836

$ 2,487

$ 2,399

$ 6,685

$ 6,418

% of All Other revenues

19.7%

27.7%

23.8%

24.3%

23.6%

Total

$ 14,197

$ 17,019

$ 19,624

$ 47,140

$ 57,291

% of total revenues

11.2%

13.4%

14.7%

12.5%

14.7%

 

Information on revenues and gross profit for hotline services, data services and voice services is presented below:

 

3Q05

2Q05

3Q04

3Q05YTD

3Q04YTD

Revenues:

 

 

 

 

 

Hotline Services

$ 57,267

$ 56,972

$ 61,538

$ 172,091

$ 176,508

Data Services

53,410

50,537

54,305

152,136

161,448

Voice Services

16,219

19,086

17,224

53,619

52,726

Total

$ 126,896

$ 126,595

$ 133,067

$ 377,846

$ 390,682

 

 

 

 

 

Gross Profit:

 

 

 

 

 

Hotline Services

$ 29,400

$ 30,217

$ 32,241

$ 90,595

$ 92,212

% of Hotline Services revenues

51.3%

53.0%

52.4%

52.6%

52.2%

Data Services

$ 16,149

$ 15,366

$ 16,267

$ 46,011

$ 51,404

% of Data Services revenues

30.2%

30.4%

30.0%

30.2%

31.8%

Voice Services

$ 5,469

$ 6,732

$ 6,133

$ 18,607

$ 18,347

% of Voice Services revenues

33.7%

35.3%

35.6%

34.7%

34.8%

Total

$ 51,018

$ 52,315

$ 54,641

$ 155,213

$ 161,963

% of total revenues

40.2%

41.3%

41.1%

41.1%

41.5%

 

Information on various balance sheet ratios, backlog and headcount is presented below. Dollar amounts are in millions.

 

3Q05

2Q05

3Q04

Accounts Receivable:

 

 

 

Gross Accounts Receivable $

$ 108.8

$ 98.0

$ 112.3

Reserve $ / %

$ 10.2 / 9.4%

$ 9.2 / 9.4%

$ 11.7 / 10.4%

Net Accounts Receivable $

$ 98.6

$ 88.8

$ 100.6

 

 

 

 

Net Days Sales Outstanding

64 days

57 days

64 days

 

 

 

 

Inventory:

 

 

 

Gross Inventory $

$ 48.2

$ 47.2

$ 46.6

Reserve $ / %

$ 5.0 / 10.4%

$ 5.0 / 10.6%

$ 4.4 / 9.4%

Net Inventory $

$ 43.2

$ 42.2

$ 42.2

 

 

 

 

Net Inventory Turns

7.9x

8.2x

8.0x

 

 

 

 

Six-Month Order Backlog

$ 54

$ 55

$ 54

 

 

 

 

Team Members

2,538

2,624

2,928

 

Investor Contact:
Black Box Corporation
Mike McAndrew
724-873-6788
Fax: 724-873-6799
E-mail: investors@blackbox.com

Share It   

Close
Print
Black Box 1-877-877-2269 Black Box Network Services