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Thursday, June 01, 2006


Black Box Corporation Reports Fourth Quarter and Total Year Fiscal 2006 Results


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PITTSBURGH, PENNSYLVANIA, June 1, 2006 -- Black Box Corporation (NASDAQ:BBOX) today reported for the fourth quarter ended March 31, 2006 diluted earnings per share of 26¢ on net income of $4.7 million or 2.7% of revenues compared to break-even last year. On a sequential quarter comparison basis, third quarter diluted earnings per share were 70¢ with corresponding net income of $12.5 million or 6.9% of revenues. Excluding restructuring charges and reconciling items described below, diluted earnings per share for the fourth quarter 2006 were 53¢ and net income was $9.6 million or 5.5% of revenues compared to diluted earnings per share of 39¢ and net income of $6.8 million or 4.3% of revenues for the fourth quarter 2005. Management believes that presenting diluted earnings per share and net income excluding restructuring charges and reconciling items is useful to investors because it provides a more meaningful comparison of the ongoing operations of the Company.


During the fourth quarter of fiscal 2006, the Company incurred a pre-tax charge of $7.5 million related to reconciling items. Of this charge, $7.1 million relates to an adjustment of earnings over multiple years, from FY03 through FY06, from the Company’s Italian Operations (“Italian Operations Adjustment”). The Italian Operations Adjustment resulted from intentional misconduct by certain local operational and financial management of the Company’s Italian Operations acting in collusion with one another for the purpose of overstating local financial results. All involved team members have been terminated and the Company intends to pursue all available legal remedies against these individuals. The misconduct was recently brought to the Company management’s attention by a team member of the Italian Operations pursuant to the Company’s “Open Door” Policy. Company management responded by immediately suspending the management team of the Italian Operations and conducting a full investigation of the matter. The Company believes that all accounting irregularities have been identified, corrective action taken, and that the Italian Operations Adjustment captures all necessary corrections. These corrections were not material to any prior reporting period.


Total revenues for the fourth quarter were $175 million, an increase of 11% from $157 million for the same period last year. On a sequential comparison basis, third quarter revenues were $182 million.


Fourth quarter cash provided by operating activities was approximately $13 million or 276% of net income, compared to $18 million for the same period last year. Fourth quarter free cash flow (defined below) was $19 million compared to $18 million last year. On a sequential comparison basis, third quarter cash provided by operating activities was $16 million or 131% of net income and free cash flow was $24 million. Black Box utilized its fourth quarter free cash flow of $19 million to fund debt reduction of $18 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.


For total fiscal 2006, diluted earnings per share were $2.13 compared to $1.68 for the same period last year, an increase of 27%. Corresponding net income for the year was $37.4 million or 5.2% of revenues, compared to $29.9 million or 5.6% of revenues for the same period last year. Excluding restructuring charges and reconciling items for fiscal years 2006 and 2005, diluted earnings per share were $2.81 and net income was $49.3 million or 6.8% of revenues in 2006 compared to diluted earnings per share of $2.13 and net income of $37.9 million or 7.1% of revenues in 2005.


Total pre-tax charges incurred for the fiscal year 2006 were: $5.4 million associated with acquisition-related expenses of Norstan; a restructuring charge of $5.3 million related to staffing level adjustments and real estate consolidations in Europe and North America; and a charge of $7.1 million related to the Italian Operations Adjustment.


Revenues for fiscal year 2006 were $721 million, an increase of 35% from $535 million for fiscal year 2005.


Cash provided by operating activities for the year was $52 million or 139% of net income, compared to $52 million or 175% of net income last year. Free cash flow was $72 million compared to $57 million last year. Black Box utilized the twelve-month free cash flow of $72 million to fund $41 million of acquisition-related activity; debt reduction of $27 million; and dividend payments of $4 million.


The Company’s 6-month order backlog was $96 million at March 31, 2006 compared to $97 million at the same period last year. On a sequential comparison basis, third quarter 6-month order backlog was $94 million.


For FY07, the Company expects total year reported revenues of approximately $1 billion. By 2Q07, the Company currently expects quarterly revenues in the range of $265 to $275 million; gross profit margin in the range of 37% to 38%; SG&A expenses in the range of 26% to 27%; corresponding EPS in the range of 90¢ to 95¢; and quarterly cash provided by operating activities in the range of $20 to $22 million.


All of the above ranges exclude acquisition-related expense and stock option-based expense (including the impact of FAS 123(R)), and are before any new mergers and acquisition activity that has not been announced.


Commenting on FY06 and the future outlook, Fred C. Young, Chief Executive Officer, said, “Black Box had many significant accomplishments in FY06. We are particularly pleased that strategically we have successfully positioned Black Box to reach the $1 billion revenue milestone in FY07, effectively doubling our business from 15 months ago. Achieving this $1 billion milestone 12 months ahead of our previously established timeframe is a significant event. On the other hand, as we conclude FY06 we are very disappointed by the situation in Italy. By no means do we believe this misconduct is representative of the overall integrity of the Black Box Team at large.


Mr. Young went on to say, “FY07 should be a record year for Black Box. We believe the 2Q07 timetable we have established to achieve our financial targets is reasonable given our historical track record, particularly with the experience and associated results of the Norstan acquisition.


“There was a tremendous amount of planning and execution required to ensure the NextiraOne transaction was completed in a manner which we felt would meet both our operational and financial objectives. We believe we have accomplished this. From an industry positioning perspective, this combination significantly strengthens Black Box’s leadership position for data, voice and hotline technical services.


“Our FY07 plan is to fully integrate NextiraOne into Black Box. We believe this will allow us to take full advantage of combined synergies in all functional areas. This applies particularly to marketing and operations, where we now have a significant increase in resources available to our clients, and the overall implementation of a much more efficient cost management philosophy. The Black Box technical services model is very unique in the industry and we believe provides the best value proposition to our clients.


“For FY07 we expect our revenue mix by technical service to be approximately 16% data services, 65% voice services and 19% hotline services. Geographically we expect our revenue mix to be approximately 85% North America and 15% International. Over time we will look to increase our International revenue mix.


“In closing, we have high expectations for the future of Black Box and will stay focused on the tasks at hand. Achieving these expectations will require us to successfully complete the integration of all of our FY06 acquisitions, aggressively sell our DVH services everyday throughout the world and continue to leverage our financial strength into significant growth by consummating high quality M&A opportunities.”


The historical information in this press release and the attached tables does not include the acquisitions of NextiraOne and NuVision which closed on April 30, 2006, and May 1, 2006, respectively.


The Company will conduct a conference call beginning at 5:00 p.m. Eastern Daylight Time today, June 1, 2006. 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 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 828910.


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. You can identify these forward-looking statements by the fact 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 conditions, successful integration of acquisitions, including the Norstan and NextiraOne businesses, the timing and costs of restructuring programs, successful marketing of DVH (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. 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 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 175,000 clients in 141 countries with 168 offices throughout the world. To learn more, visit the Black Box website at www.blackbox.com


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


                         BLACK BOX CORPORATION
                   CONSOLIDATED STATEMENTS OF INCOME

                               Three months ended      Year ended
                               ------------------- -------------------
                               March 31, March 31, March 31, March 31,
In thousands, except per share   2006      2005      2006      2005
----------------------------------------------------------------------
Revenue:
  Hotline products             $ 53,667  $ 55,510  $213,946  $227,601
  On-Site services              121,201   101,720   507,389   307,475
                                --------  --------  --------  --------
  Total                         174,868   157,230   721,335   535,076

Cost of sales
  Hotline products               29,209    26,785   108,220   108,281
  On-Site services               81,533    70,729   330,765   211,866
                                --------  --------  --------  --------
  Total                         110,742    97,514   438,985   320,147
                                --------  --------  --------  --------

Gross profit                     64,126    59,716   282,350   214,929
Selling, general &
 administrative expense          53,858    52,119   205,866   160,002
Restructuring and other charges       -     5,059     5,290     5,059
Intangibles amortization            764     1,145     4,999     1,332
                                --------  --------  --------  --------
Operating income                  9,504     1,393    66,195    48,536
Interest expense, net             2,437     1,319     9,123     2,755
Other expenses, net                 (43)       22        36       115
                                --------  --------  --------  --------
Income before income taxes        7,110        52    57,036    45,666
Provision for income taxes        2,454        18    19,678    15,754
                                --------  --------  --------  --------
Net income                     $  4,656  $     34  $ 37,358  $ 29,912
                                ========  ========  ========  ========

Basic earnings per common share$   0.26  $   0.00  $   2.18  $   1.72
                                ========  ========  ========  ========

Diluted earnings per common
 share                         $   0.26  $   0.00  $   2.13  $   1.68
                                ========  ========  ========  ========

Weighted average common shares   17,617    17,148    17,164    17,411
                                ========  ========  ========  ========

Weighted average common &
 common equivalent shares
 outstanding                     18,247    17,524    17,544    17,845
                                ========  ========  ========  ========



                         BLACK BOX CORPORATION
                      CONSOLIDATED BALANCE SHEETS

                                                 March 31,  March 31,
In thousands                                        2006       2005
----------------------------------------------------------------------
Assets
Cash and cash equivalents                        $  11,207  $  11,592
Accounts receivable, net                           116,713    116,865
Lease receivables                                      512      1,697
Inventories, net                                    53,926     57,176
Costs and estimated earnings in excess
  of billings on uncompleted contracts              23,803     25,695
Deferred tax asset                                   8,973      9,236
Net current assets of discontinued operations          467        549
Other current assets                                15,523     14,724
                                                  ---------  ---------
      Total current assets                         231,124    237,534
                                                  ---------  ---------
Property, plant and equipment, net                  35,124     38,268
Goodwill, net                                      468,724    444,567
Intangibles, net                                    55,440     44,157
Lease receivables, net of current portion                -        473
Deferred tax asset                                   4,231      3,793
Discontinued operations, net of current portion          -        373
Other assets                                         5,091      3,725
                                                  ---------  ---------
  Total assets                                   $ 799,734  $ 772,890
                                                  ---------  ---------
Liabilities
Current maturities of long-term debt             $   1,049  $     692
Current maturities of discounted lease rentals          30        890
Accounts payable                                    44,943     36,032
Billings in excess of costs and estimated
earnings on uncompleted contracts                    8,648      8,947
Deferred revenue                                    22,211     21,456
Accrued liabilities:
  Compensation and benefits                         13,954     14,270
  Restructuring                                      3,292      6,709
  Other liabilities                                 27,817     32,708
  Income taxes                                       5,924      3,295
                                                  ---------  ---------
      Total current liabilities                    127,868    124,999
                                                  ---------  ---------
Long-term debt                                     122,673    147,196
Discounted lease rentals                                 -         30
Deferred taxes                                           -          -
Other liabilities                                      887         75
Restructuring reserve                                7,406      9,889
Stockholders' Equity
Common stock                                            25         24
Additional paid-in capital                         362,810    336,290
Retained earnings                                  461,853    428,632
Treasury stock, at cost                           (296,824)  (296,797)
Accumulated other comprehensive gain                13,036     22,552
                                                  ---------  ---------
       Total stockholders' equity                  540,900    490,701
                                                  ---------  ---------
  Total liabilities and stockholders' equity     $ 799,734  $ 772,890
                                                  ---------  ---------


                        BLACK BOX CORPORATION
                CONSOLIDATED STATEMENTS OF CASH FLOWS

                              Three Months Ended       Year Ended
                             -------------------- --------------------
                             March 31, March 31,  March 31, March 31,
In thousands                   2006       2005      2006       2005
----------------------------------------------------------------------
Operating Activities
 Net income                  $  4,656  $      34  $ 37,358  $  29,912
 Adjustments to reconcile net
  income to cash
    Provided by operating
     activities:
    Intangibles amortization      764      1,145     4,999      1,332
    Depreciation                2,153      2,253     8,931      6,623
    Deferred tax provision /
     (benefit)                  1,871     (1,852)     (212)       (77)
    Stock compensation
     expense                       --         --        --        680
    Tax benefit from
     exercised stock options      147        (83)   (3,200)    (3,472)
 Changes in operating assets
  and liabilities:
    Accounts receivable, net    9,296      7,725     9,369      8,878
    Inventories, net             (673)     2,336     5,000        (76)
    Other current assets        6,271      2,419     7,541      3,307
    Proceeds from lease
     contracts                    (88)       504     1,658        504
    Accounts payable and
     accrued liabilities      (11,512)     3,317   (19,647)     4,595
                              --------- ---------- --------- ---------
 Net cash provided by
  operating activities       $ 12,885  $  17,798  $ 51,797  $  52,206
                              --------- ---------- --------- ---------
Investing Activities
    Capital expenditures, net$   (751) $    (470) $ (2,670) $  (2,319)
    Acquisition of
     businesses, net of cash
     acquired                      --   (102,553)  (40,682)  (102,553)
    Prior merger-related
     payments                      --        605      (378)       107
                              --------- ---------- --------- ---------
 Net cash used in investing
  activities                 $   (751) $(102,418) $(43,730) $(104,765)
                              --------- ---------- --------- ---------
Financing Activities
    Proceeds/(repayments) on
     borrowings, net         $(18,689) $ 106,414  $(26,107) $ 110,450
    Repayments on discounted
     lease rentals                (43)      (458)     (890)      (458)
    Proceeds from exercise of
     options                    6,976        609    23,320      7,919
    Payment of dividends       (1,045)    (1,038)   (4,094)    (3,847)
    Deferred financing costs     (180)    (1,117)     (180)    (1,352)
    Purchase of treasury
     stock                        (13)   (19,327)      (27)   (56,912)
                              --------- ---------- --------- ---------
 Net cash provided/(used) in
  financing activities       $(12,994) $  85,083  $ (7,978) $  55,800
Foreign currency exchange
 impact on cash              $    (76) $     182  $   (474) $    (955)
                              --------- ---------- --------- ---------
Increase/(decrease) in cash &
 cash equivalents            $   (936) $     645  $   (385) $   2,286
Cash & cash equivalents at
 beginning of period           12,143     10,947    11,592      9,306
                              --------- ---------- --------- ---------
Cash & cash equivalents at
 end of period               $ 11,207  $  11,592  $ 11,207  $  11,592
                              --------- ---------- --------- ---------


    Non-GAAP Measurements

    The financial information presented in this release contains
certain non-GAAP financial measures. Management uses the non-GAAP
measures to improve the comparisons between fiscal periods. Management
believes the use of non-GAAP measures improves the investor's ability
to make comparisons between fiscal periods and provides useful
information to investors regarding the Company's financial condition
and its results of operations. In accordance with SEC Regulation G,
the following financial highlights tables reconcile (1) free cash
flow; (2) cash provided by operating activities excluding
restructuring payments and satisfaction of a litigation judgment; (3)
net income excluding restructuring charges and reconciling items; and
(4) diluted EPS excluding restructuring charges and reconciling items;
to the most directly comparable U.S. GAAP measures. The additional
non-GAAP financial information presented should be considered in
conjunction with, and not as a substitute for, or superior to, the
financial information presented in accordance with GAAP. All dollar
amounts are in thousands.
    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. A
reconciliation of cash provided by operating activities to free cash
flow is presented below:

                                4Q06    3Q06    4Q05    FY06    FY05
----------------------------------------------------------------------
Cash provided by operating
 activities                   $12,885 $16,438 $17,798 $51,797 $52,206
   Capital expenditures          (964) (1,551)   (927) (4,115) (3,506)
   Capital disposals              213     231     457   1,445   1,187
   Proceeds from stock option
    exercises                   6,976   8,892     609  23,320   7,919
   Foreign currency exchange
    impact on cash                (76)   (408)    182    (474)   (955)
----------------------------------------------------------------------
Free cash flow                $19,034 $23,602 $18,119 $71,973 $56,851
----------------------------------------------------------------------


    Management believes that presenting cash provided by operating
activities exclusive of the cash flow impact from items that rarely
occur or only occur once is a more meaningful measurement of cash
provided by operating activities on an ongoing basis and allows the
reader to more accurately compare other fiscal periods where the
events did not occur. 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:

                                4Q06    3Q06    4Q05    FY06    FY05
----------------------------------------------------------------------
Cash provided by operating
 activities                   $12,885 $16,438 $17,798 $51,797 $52,206
   Restructuring payments       1,753   1,537   1,266  10,918   1,653
   Satisfaction of a
    litigation  judgment           --      --      --   1,778      --
----------------------------------------------------------------------
Cash provided by operating
 activities excluding
 restructuring payments and
 satisfaction of a litigation
 judgment                     $14,638 $17,975 $19,064 $64,493 $53,859
----------------------------------------------------------------------


    Management believes that presenting net income and diluted
earnings per share excluding restructuring charges and reconciling
items is useful to investors because it provides a more meaningful
comparison of the ongoing operations of the Company. Included in
reconciling items are acquisition-related expenses from the purchase
of Norstan and the Italian Operations Adjustment in FY06 and
acquisition-related expenses from the purchase of Norstan, settlement
of a litigation matter and costs associated with the establishment and
review of procedures to comply with the requirements of Section 404 of
the Sarbanes-Oxley Act of 2002 in FY05. A reconciliation of net income
to net income excluding restructuring charges and reconciling items is
presented below:

                                          4Q06  4Q05    FY06    FY07
----------------------------------------------------------------------
Net income                              $4,656    $34 $37,358 $29,912
% of revenues                             2.7%   0.0%    5.2%    5.6%
Restructuring charges, after tax impact     --  3,314   3,465   3,314
Reconciling items, after tax impact      4,931  3,471   8,431   4,650
----------------------------------------------------------------------
Net income excluding restructuring
 charges and reconciling items          $9,587 $6,819 $49,254 $37,876
% of revenues                             5.5%   4.3%    6.8%    7.1%
----------------------------------------------------------------------

    A reconciliation of diluted earnings per common share (EPS) to
diluted EPS excluding restructuring charges and reconciling items is
presented below:

                                          4Q06  4Q05     FY06    FY05
----------------------------------------------------------------------
Diluted EPS                              $0.26  $0.00   $2.13   $1.68
EPS impact of restructuring charges         --   0.19    0.20    0.19
EPS impact of reconciling items           0.27   0.20    0.48    0.26
----------------------------------------------------------------------
Diluted EPS excluding restructuring
 charges and reconciling items           $0.53  $0.39   $2.81   $2.13
----------------------------------------------------------------------


    SUPPLEMENTAL INFORMATION:

    Additionally, the following supplemental information is being
provided for comparisons of fourth quarter ended March 31, 2006
reported results to this year's third quarter and prior year's fourth
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 restructuring charges and reconciling items. Reconciling
items consist of acquisition-related expenses from the purchase of
Norstan and the Italian Operations Adjustment in the 2006 periods and
acquisition-related expenses from the purchase of Norstan, settlement
of a litigation matter and costs associated with the establishment and
review of procedures to comply with the requirements of Section 404 of
the Sarbanes-Oxley Act of 2002 in the 2005 periods. Management
believes this enables a clearer understanding of the ongoing
operations of the Company and allows the reader to more accurately
compare other fiscal periods where the events did not occur.
    Information on revenues and operating income for geographical
segments is presented below:

                           4Q06     3Q06     4Q05     FY06     FY05
----------------------------------------------------------------------
Revenues:
  North America          $137,912 $143,173 $112,047 $564,700 $355,013
  Europe                   27,152   29,950   35,501  120,051  142,838
  All Other                 9,804    9,012    9,682   36,584   37,225
                          -------- -------- -------- -------- --------
  Total                  $174,868 $182,135 $157,230 $721,335 $535,076

Operating income:
  North America          $  9,414 $ 15,740 $   (295)$ 53,550 $ 26,798
  % of North America
   revenues                  6.8%    11.0%   (0.3)%     9.5%     7.5%
  Europe                   (1,643)   4,101      274    5,518   13,639
  % of Europe revenues     (6.1)%    13.7%     0.8%     4.6%     9.5%
  All Other                 1,733    1,771    1,414    7,127    8,099
  % of All Other revenues   17.7%    19.7%    14.6%    19.5%    21.8%
                          -------- -------- -------- -------- --------
  Total                  $  9,504 $ 21,612 $  1,393 $ 66,195 $ 48,536
  % of Total revenues        5.4%    11.9%     0.9%     9.2%     9.1%

Restructuring charges and
 reconciling items
  North America          $    464 $  1,245 $  9,356 $  7,358 $ 11,156
  Europe                    7,065       --    1,003   10,807    1,003
  All Other                    --       --       --       --       --
                          -------- -------- -------- -------- --------
  Total                  $  7,529 $  1,245 $ 10,359 $ 18,165 $ 12,159

Operating income excluding
 restructuring charges and
 reconciling items
  North America          $  9,878 $ 16,985 $  9,061 $ 60,908 $ 37,954
  % of North America
   revenues                  7.2%    11.9%     8.1%    10.8%    10.7%
  Europe                    5,422    4,101    1,277   16,325   14,642
  % of Europe revenues      20.0%    13.7%     3.6%    13.6%    10.3%
  All Other                 1,733    1,771    1,414    7,127    8,099
  % of All Other revenues   17.7%    19.7%    14.6%    19.5%    21.8%
                          -------- -------- -------- -------- --------
  Total                  $ 17,033 $ 22,857 $ 11,752 $ 84,360 $ 60,695
  % of Total revenues        9.7%    12.5%     7.5%    11.7%    11.3%
------------------------- -------- -------- -------- -------- --------

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

                           4Q06     3Q06     4Q05     FY06     FY05
----------------------------------------------------------------------
Revenues:
  Data Services          $ 44,017 $ 47,083 $ 48,799 $196,585 $200,935
  Voice Services           77,184   82,281   52,921  310,804  106,540
  Hotline Services         53,667   52,771   55,510  213,946  227,601
                          -------- -------- -------- -------- --------
  Total                  $174,868 $182,135 $157,230 $721,335 $535,076

Gross Profit:
  Data Services          $ 11,268 $ 14,794 $ 13,343 $ 57,068 $ 59,354
  % of Data Services
   revenues                 25.6%    31.4%    27.3%    29.0%    29.5%
  Voice Services           28,400   32,145   17,648  119,556   36,255
  % of Voice Services
   revenues                 36.8%    39.1%    33.3%    38.5%    34.0%
  Hotline Services         24,458   26,463   28,725  105,726  119,320
  % of Hotline Services
   revenues                 45.6%    50.1%    51.7%    49.4%    52.4%
                          -------- -------- -------- -------- --------
  Total                  $ 64,126 $ 73,402 $ 59,716 $282,350 $214,929
  % of Total revenues       36.7%    40.3%    38.0%    39.1%    40.2%

Reconciling items:
  Data Services          $  2,071       --       -- $  2,071       --
  Voice Services               --       --       --       --       --
  Hotline Services          1,517       --       --    1,517       --
                          -------- -------- -------- -------- --------
  Total                  $  3,588       --       -- $  3,588       --

Gross Profit including:
  Data Services          $ 13,339 $ 14,794 $ 13,343 $ 59,139 $ 59,354
  % of Data Services
   revenues                 30.3%    31.4%    27.3%    30.1%    29.5%
  Voice Services           28,400   32,145   17,648  119,556   36,255
  % of Voice Services
   revenues                 36.8%    39.1%    33.3%    38.5%    34.0%
  Hotline Services         25,975   26,463   28,725  107,243  119,320
  % of Hotline Services
   revenues                 48.4%    50.1%    51.7%    50.1%    52.4%
                          -------- -------- -------- -------- --------
  Total                  $ 67,714 $ 73,402 $ 59,716 $285,938 $214,929
  % of Total revenues       38.7%    40.3%    38.0%    39.6%    40.2%

Information on revenues on a same-office basis is presented below:

                                                4Q06    4Q05    Change
----------------------------------------------------------------------
Revenues as reported                         $174,868 $157,230     11%
Less revenues from offices added since Fiscal
 2005                                         (58,440) (35,208)
                                             -------------------------
Revenues on same-office basis                $116,428 $122,022    (5)%
----------------------------------------------------------------------

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

                                   4Q06         3Q06        4Q05
----------------------------------------------------------------------
Accounts Receivable:
  Gross Accounts Receivable $    $126.2       $133.9      $124.2
  Reserve $ / %                    $9.5/7.5%    $8.3/6.2%   $7.3/5.9%
                                  ------       ------      ------
  Net Accounts Receivable $      $116.7       $125.6      $116.9

  Net Days Sales Outstanding    54 days      57 days     57 days

Inventory:
  Gross Inventory $               $68.2        $66.9       $69.7
  Reserve $ / %                   $14.3/21.0%  $13.5/20.2% $12.5/17.9%
                                  ------       ------      ------
  Net Inventory $                 $53.9        $53.4       $57.2

  Net Inventory Turns              7.3x         6.8x        6.4x

Six-Month Order Backlog             $96          $94         $97

Team Members                      3,295        3,273       3,371
----------------------------------------------------------------------

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

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