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Tuesday, October 31, 2006


Black Box Corporation Reports Second Quarter and Year-To-Date Fiscal 2007 Results


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- Reports record quarterly revenues of $271 million and record quarterly operating EPS of 91¢ -


PITTSBURGH, PENNSYLVANIA, October 31, 2006 -- Black Box Corporation (NASDAQ:BBOX) today reported for second quarter Fiscal 2007 ended September 30, 2006 diluted earnings per share of 74¢ on net income of $13.1 million or 4.8% of revenues compared to diluted earnings per share of 74¢ on net income of $12.8 million or 6.9% of revenues for the same quarter last year. On a sequential quarter comparison basis, first quarter Fiscal 2007 diluted earnings per share were 43¢ on net income of $7.8 million or 3.4% of revenues. Excluding reconciling items, operating earnings per share (which is a non-GAAP term and is defined below) for second quarter Fiscal 2007 were 91¢ on operating net income (which is a non-GAAP term and is defined below) of $16.1 million or 5.9% of revenues compared to operating earnings per share of 78¢ on operating net income of $13.6 million or 7.4% of revenues for the same quarter last year. Management believes that presenting operating earnings per share and operating net income excluding reconciling items is useful to investors because it provides a more meaningful comparison of the ongoing operations of the Company.


During second quarter Fiscal 2007, the Company’s reconciling items included pre-tax charges of $1.9 million for amortization of intangible assets on acquisitions, $1.6 million for stock-based compensation expense, and $1.2 million for asset write-up depreciation expense on acquisitions. The impact of these reconciling items after tax on net income and EPS is $3.0 million and 17¢, respectively. During second quarter Fiscal 2006, as previously disclosed, the Company’s reconciling items included pre-tax charges of $1.1 million for amortization of intangible assets on acquisitions and $0.2 million for asset write-up depreciation expense on acquisitions. The impact of these reconciling items after tax on net income and EPS is $0.8 million and 5¢, respectively. See below for further discussion regarding management’s use of non-GAAP accounting measurements.


Second quarter Fiscal 2007 total revenues were $271 million, an increase of $86 million or 47% from $185 million for the same quarter last year. On a sequential quarter comparison basis, second quarter Fiscal 2007 total revenues increased $41 million or 18% from first quarter Fiscal 2007 total revenues of $230 million.


During second quarter Fiscal 2007, the Company repurchased 441,000 shares of common stock for approximately $18 million. Since the inception of the program in April 1999, the Company has repurchased 7.4 million shares of common stock for approximately $315 million of consideration. The funding of this program has been provided primarily through the Company’s free cash flow generation.


Second quarter Fiscal 2007 cash provided by operating activities was $9 million or 70% of net income, compared to $12 million or 91% of net income for the same quarter last year. Second quarter Fiscal 2007 free cash flow (which is a non-GAAP term and is defined below) was $12 million compared to $18 million for the same quarter last year. On a sequential quarter comparison basis, first quarter Fiscal 2007 cash provided by operating activities was $13 million or 161% of net income and free cash flow was $14 million. Black Box utilized its second quarter Fiscal 2007 free cash flow to repurchase $11 million of its common stock and pay dividends 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 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 six month period ending September 30, 2006, diluted earnings per share were $1.18 on net income of $20.9 million or 4.2% of revenues compared to diluted earnings per share of $1.17 on net income of $20.2 million or 5.5% of revenues for the same period last year. Excluding reconciling items, operating earnings per share for the six month period ending September 30, 2006 were $1.50 on operating net income of $26.6 million or 5.3% of revenues compared to operating earnings per share of $1.53 on operating net income of $26.3 million or 7.2% of revenues for the same period last year.


For the six month period ending September 30, 2006, the Company’s reconciling items included pre-tax charges of $3.3 million for amortization of intangible assets on acquisitions, $3.2 million for stock-based compensation expense, $1.2 million for asset write-up depreciation expense on acquisitions, and $1.1 million for restructuring charges / severance costs. The impact of these reconciling items after tax on net income and EPS is $5.7 million and 32¢, respectively. During the six month period ended October 1, 2005, as previously disclosed, the Company’s reconciling items included pre-tax charges of $5.3 million for restructuring charges / severance costs, $2.2 million for amortization of intangible assets on acquisitions, and $1.9 million for asset write-up depreciation expense on acquisitions. The impact of these reconciling items after tax on net income and EPS is $6.2 million and 36¢, respectively. See below for further discussion regarding management’s use of non-GAAP accounting measurements.


For the six month period ending September 30, 2006, total revenues were $502 million, an increase of $138 million or 38% from $364 million for the same period last year.


Cash provided by operating activities for the six month period was $22 million or 104% of net income compared to $22 million or 111% of net income for the same period last year. Free cash flow was $26 million compared to $29 million for the same period last year. Black Box utilized its six month period free cash flow to fund mergers and acquisitions of $13 million, repurchase $11 million of its common stock, and pay dividends of $2 million.


The Company’s 6-month order backlog was $165 million at September 30, 2006 compared to $104 million for the same quarter ended last year. On a sequential quarter end comparison basis, the Company’s 6-month order backlog was $168 million at July 1, 2006.


“We are pleased to report consecutive quarters of record revenues and now record operating earnings per share,” stated Fred C. Young, Chief Executive Officer of Black Box Corporation. “These two significant milestones were accomplished through the combined efforts of our 4,600 Worldwide Black Box Team Members. With revenues now annualizing at $1 billion, we will look to build upon our first half success moving forward.”


The Company is sponsoring an Investor Day in two separate sessions. The event will be held in New York City, NY on Tuesday, November 14, 2006 and Boston, MA on Wednesday, November 15, 2006. Both days events are expected to begin at approximately 10:00 a.m. Eastern Standard Time and conclude at approximately 2:00 p.m. The program, which is open to the general public, will be hosted by Fred C. Young, Chief Executive Officer, and Michael McAndrew, Chief Financial Officer. Interested participants can register through investors@blackbox.com or by contacting investor relations at 724-873-6788.


The Company will conduct a conference call beginning at 5:00 p.m. Eastern Standard Time today, October 31, 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 844113.


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 170 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.


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, NextiraOne, and Nu-Vision Technologies 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 CORPORATION
             CONDENSED CONSOLIDATED STATEMENTS OF INCOME
               (In thousands, except per share amounts)

                      Three months ended         Six months ended
                   ------------------------- -------------------------
                   September 30, October 1,  September 30, October 1,
                       2006         2005         2006         2005
----------------------------------------------------------------------
Revenues:
  Hotline products $     55,063  $   54,056  $    107,288  $  107,508
  On-Site services      216,262     130,994       394,432     256,824
                   ------------------------- -------------------------
     Total              271,325     185,050       501,720     364,332

Cost of sales:
  Hotline products       27,847      26,829        53,308      52,703
  On-Site services      144,442      84,339       263,532     166,807
                   ------------------------- -------------------------
     Total              172,289     111,168       316,840     219,510
                   ------------------------- -------------------------

Gross profit             99,036      73,882       184,880     144,822

Selling, general &
 administrative
 expenses                72,784      50,647       141,357     101,567
Restructuring and
 other charges               --          --            --       5,290
Intangibles
 amortization             1,931       1,328         3,437       2,886
                   ------------------------- -------------------------

Operating income         24,321      21,907        40,086      35,079

Interest expense
 (income), net            4,126       2,330         7,766       4,289
Other expenses
 (income), net               72          40           187         (35)
                   ------------------------- -------------------------

Income before
 provision for
 income taxes            20,123      19,537        32,133      30,825

Provision for
 income taxes             7,044       6,740        11,247      10,634
                   ------------------------- -------------------------

Net income         $     13,079  $   12,797  $     20,886  $   20,191
                   ========================= =========================

Earnings per common
 share:
   Basic           $       0.75  $     0.75  $       1.20  $     1.19
                   ========================= =========================
   Diluted         $       0.74  $     0.74  $       1.18  $     1.17
                   ========================= =========================

Weighted average
 common shares
 outstanding
   Basic                 17,513      17,022        17,415      16,933
                   ========================= =========================
   Diluted               17,743      17,374        17,766      17,208
                   ========================= =========================
                        BLACK BOX CORPORATION
                CONDENSED CONSOLIDATED BALANCE SHEETS
                            (In thousands)

                                           September 30,   March 31,
                                                2006          2006
----------------------------------------------------------------------
Assets
  Cash and cash equivalents                $     15,758  $     11,207
  Accounts receivable, net                      185,333       116,713
  Inventories, net                               71,877        53,926
  Costs and estimated earnings in excess of
   billings on uncompleted contracts             56,553        23,803
  Deferred tax asset                              9,489         8,973
  Prepaid and Other current assets               27,606        16,502
                                           ------------- -------------
             Total current assets               366,616       231,124

  Property, plant and equipment, net             41,595        35,124
  Goodwill, net                                 586,273       468,724
  Intangibles:
        Customer relationships, net              53,996        24,657
        Other Intangibles, net                   34,799        30,783
  Deferred tax asset                              2,654         4,231
  Other assets                                    4,343         5,091
                                           ------------- -------------
                Total assets               $  1,090,276  $    799,734
                                           ============= =============

Liabilities
  Accounts payable                         $     87,127  $     44,943
  Accrued compensation and benefits              20,656        13,954
  Deferred revenue                               51,120        22,211
  Restructuring reserve                          14,246         3,292
  Billings in excess of costs and estimated
   earnings on uncompleted contracts             20,571         8,648
  Current maturities of long-term debt              608         1,049
  Other liabilities                              59,253        33,771
                                           ------------- -------------
             Total current liabilities          253,581       127,868

  Long-term debt                                251,945       122,673
  Other liabilities                              27,708         8,293
                                           ------------- -------------
              Total liabilities                 533,234       258,834

Stockholders' Equity
  Common stock                                       25            25
  Additional paid-in capital                    373,045       362,810
  Treasury stock, at cost                      (314,411)     (296,824)
  Accumulated other comprehensive income         17,746        13,036
  Retained earnings                             480,637       461,853
                                           ------------- -------------
             Total stockholders' equity         557,042       540,900
                                           ------------- -------------

                 Total liabilities and
                  stockholders' equity     $  1,090,276  $    799,734
                                           ============= =============
                        BLACK BOX CORPORATION
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In thousands)

                        Three months ended        Six months ended
                     -------------------------------------------------
                     September 30, October 1, September 30, October 1,
                         2006         2005        2006         2005
----------------------------------------------------------------------
Operating Activities
Net income           $     13,079  $  12,797  $     20,886  $  20,191

Adjustments to
 reconcile net income
 to net cash provided
 by (used for)
 operating
 activities:

  Intangibles
   amortization and
   depreciation             5,647      3,589         9,453      7,380
  Deferred taxes              (82)       440         1,166     (2,053)
  Stock compensation
   expense                  1,572         --         3,192         --
  Tax benefit from
   exercised stock
   options                   (774)    (1,940)         (432)    (1,971)
Changes in operating
 assets and
 liabilities:
  Accounts
   receivable, net        (14,736)   (13,698)       (3,518)    (8,913)
  Inventories, net         (3,668)       672        (4,734)     5,704
  All other current
   assets excluding
   deferred tax asset       2,283      8,222          (516)     1,586
  Liabilities
   exclusive of long-
   term debt                5,795      1,589        (3,774)       550
                     -------------------------------------------------
      Net cash
       provided by
       (used for)
       operating
       activities    $      9,116  $  11,671  $     21,723  $  22,474
                     -------------------------------------------------

Investing Activities
  Capital
   expenditures      $       (589) $  (1,108) $     (2,112) $  (1,600)
  Capital disposals           373        188           403      1,001
  Acquisition of
   businesses
   (payments)/
   recoveries               1,759    (13,362)     (127,402)   (26,854)
  Prior merger-
   related
   (payments)/
   recoveries                 (39)      (209)       (1,389)      (165)
                     -------------------------------------------------
      Net cash
       provided by
       (used for)
       investing
       activities    $      1,504  $ (14,491) $   (130,500) $ (27,618)
                     -------------------------------------------------

Financing Activities
  Proceeds from
   borrowings        $     63,997  $  49,699  $    258,519  $ 105,948
  Repayment of
   borrowings             (57,467)   (52,058)     (131,236)  (105,235)
  Repayment on
   discounted lease
   rentals                     (3)      (244)          (24)      (667)
  Proceeds from
   exercise of
   options                  3,081      7,316         6,611      7,452
  Payment of
   dividends               (1,061)    (1,010)       (2,116)    (2,021)
  Purchase of
   treasury stock         (17,587)       (10)      (17,587)       (10)
                     -------------------------------------------------
      Net cash
       provided by
       (used for)
       financing
       activities    $     (9,040) $   3,693  $    114,167  $   5,467

Foreign currency
 exchange impact on
 cash                $       (182) $      44  $       (839) $      10
                     -------------------------------------------------

Increase / (decrease)
 in cash and cash
 equivalents         $      1,398  $     917  $      4,551  $     333

Cash and cash
 equivalents at
 beginning of period $     14,360  $  11,008  $     11,207  $  11,592
                     -------------------------------------------------

Cash and cash
 equivalents at end
 of period           $     15,758  $  11,925  $     15,758  $  11,925
                     -------------------------------------------------

Non-GAAP Financial Measurements

The Company provides non-GAAP ("adjusted financial measurements") such as free cash flow, operating net income, and operating earnings per share (EPS) as a supplement to United States Generally Accepted Accounting Principles ("GAAP") regarding the Company's operational performance. These adjusted financial measurements exclude the impact of certain items and, therefore, have not been calculated in accordance with GAAP. Pursuant to the requirements of Regulation G, the Company has provided Management explanations regarding their use and the usefulness of adjusted financial measurements, definitions of the adjusted financial measurements, and reconciliations to the most directly comparable GAAP financial measures which are provided below.


Management uses adjusted financial measurements (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, (d) to measure operational profitability, and (e) as an important factor in determining variable compensation for Management and its team members. Moreover, the Company has historically reported these adjusted financial measurements as a means of providing consistent and comparable information with past reports of financial results.


While Management believes these adjusted financial measurements provide useful supplemental information to investors, there are limitations associated with the use of adjusted financial measurements. The limitations include (i) the 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, (ii) the non-GAAP financial measures exclude certain non-cash amortization of intangible assets on acquisitions, however, do not specifically exclude the added benefits of these costs, such as revenue and contributing operating margin, (iii) the non-GAAP financial measures exclude restructuring and severance related costs incurred during the periods reported that will impact future operating results, (iv) the non-GAAP financial measures exclude non-cash stock-based compensation charges, which is similar to cash compensation paid to employees and is an integral part of achieving our operating results, (v) the non-GAAP financial measures exclude non-cash asset write-up depreciation expense on acquisitions related to acquisitions made during recent years which is derived from the book value to fair market value write-up on acquired assets, and (vi) there is no assurance the excluded items in the non-GAAP financial measures will not occur in the future. The Company compensates for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reviewing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures.


Adjusted financial measurements are not in accordance with, or an alternative for, GAAP. The Company's adjusted financial measurements are not meant to be considered in isolation or as a substitute for comparable GAAP financial measurements, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.


Free Cash Flow

Free cash flow is defined by the Company as cash provided by operating activities less net capital expenditures, plus proceeds from stock option exercises, plus or minus foreign currency translation adjustments. Management's reasons for exclusion of each item are explained in further detail below.


Net capital expenditures

The Company believes net capital expenditures must be included with cash provided by operating activities to more properly reflect the actual cash available to the Company. Net capital expenditures are typically material and directly impact the availability of the Company's operating cash. Net capital expenditures are comprised of capital expenditures and capital disposals.


Proceeds from stock option exercises

The Company believes that proceeds from stock option exercises should be added to cash provided by operating activities to more accurately reflect the actual cash available to the Company. The Company has demonstrated a recurring inflow of cash related to its stock-based compensation plans and since this cash is immediately available to the Company, it directly impacts the availability of the Company's operating cash. The amount of proceeds from stock option exercises is dependent upon a number of variables, including the number and exercise price of outstanding options and the trading price of the Company's common stock. In addition, the timing of stock option exercises is under the control of the individual option holder and is not in the control of the Company. As a result, there can be no assurance as to the timing or amount of any proceeds from stock option exercises.


Foreign currency translation adjustment

Due to the size of the Company's international operations, and the ability of the Company to utilize cash generated from foreign operations locally without the need to convert such currencies to US dollars on a regular basis, the Company believes that it is appropriate to adjust its operating cash flows to take into account the positive and / or negative impact of such charges as such adjustment provides an appropriate measure of the availability of the Company's operating cash on a world-wide basis. A limitation of adjusting cash flows to account for the foreign currency impact is that it may not provide an accurate measure of cash available in US dollars.


A reconciliation of cash provided by operating activities to free cash flow is presented below:

                                2Q07    1Q07    2Q06  2QYTD07 2QYTD06
----------------------------------------------------------------------
Cash provided by operating
 activities                   $ 9,116 $12,607 $11,671 $21,723 $22,474
  Capital expenditures           (589) (1,523) (1,108) (2,112) (1,600)
  Capital disposals               373      30     188     403   1,001
  Proceeds from stock option
   exercises                    3,081   3,530   7,316   6,611   7,452
  Foreign currency exchange
   impact on cash                (182)   (657)     44    (839)     10
                              ----------------------------------------
Free cash flow                $11,799 $13,987 $18,111 $25,786 $29,337
----------------------------------------------------------------------

Operating net income and operating earnings per share (EPS)

Management believes that operating net income, defined as net income less reconciling items including restructuring charges / severance costs, amortization of intangible assets on acquisitions, stock-based compensation expense, and asset write-up depreciation expense on acquisitions and operating EPS, defined as operating net income divided by weighted average common shares outstanding (diluted), provides investors additional important information to enable them to assess, in a way Management assesses, the Company's current and future operations. Management's reason for exclusion of each item is explained in further detail below:


Restructuring charges / severance costs

The Company believes that incurring costs in the current period(s) as part of a formal restructuring plan or as a result of economies of scale from acquisitions will result in a long-term positive impact on financial performance in the future. Restructuring charges and non-restructuring severance costs are presented in accordance with GAAP in our Condensed Statements of Income. However, due to the material amount of additional costs incurred during a single or possibly two successive periods, Management believes that exclusion of these costs and their related tax impact provides a more accurate reflection of the Company's ongoing financial performance.


Amortization of intangible assets on acquisitions

The Company incurs non-cash amortization expense from intangible assets related to various acquisitions it has made in recent years. Management excludes these expenses and their related tax impact for the purpose of calculating non-GAAP financial measures when it evaluates the continuing operational performance of the Company because these costs are fixed at the time of an acquisition, are then amortized over a period of several years after the acquisition, and generally cannot be changed or influenced by Management after the acquisition.


Stock-based compensation expense

The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123R") as of April 1, 2006, the first day of the Company's Fiscal 2007, using the modified prospective transition method. This transition method requires non-cash compensation expense to be recognized for all share-based payments granted after the date of adoption and for all unvested awards existing on the date of adoption. Stock-based compensation expense is now an integral part of ongoing operations since it is considered similar to other types of compensation to employees. However, Management believes that the application of the modified prospective transition method may result in misleading period-over-period comparisons during the transition year of Fiscal 2007 and is providing an adjusted disclosure, which excludes stock-based compensation and its related tax impact in the current period.


Asset write-up depreciation expense on acquisitions

The Company incurs non-cash asset write-up depreciation expense on acquisitions related to acquisitions made during recent years. Specifically, this non-cash expenditure is derived from the book value to fair market value write-up on acquired assets. Asset write-ups are depreciated over their remaining useful life which generally falls between one to five years. Management excludes these expenses and their related tax impact for the purpose of calculating non-GAAP financial measures when it evaluates the continuing operational performance of the Company because these costs are fixed from acquisition to the end of the asset's useful life, and generally cannot be changed or influenced by Management after the acquisition.


A reconciliation of net income to operating net income is presented below:

                                     2Q07     2Q06   2QYTD07  2QYTD06
----------------------------------------------------------------------
Net income                         $13,079  $12,797  $20,886  $20,191
% of revenues                          4.8%     6.9%     4.2%     5.5%
Reconciling items, after tax         3,027      834    5,736    6,154
                                   -----------------------------------
Operating Net Income               $16,106  $13,631  $26,622  $26,345
% of revenues                          5.9%     7.4%     5.3%     7.2%
----------------------------------------------------------------------

A reconciliation of diluted earnings per common share (EPS) to operating EPS is presented below:

                                        2Q07    2Q06   2QYTD07 2QYTD06
----------------------------------------------------------------------
Diluted EPS                            $0.74  $  0.74  $ 1.18  $ 1.17
EPS impact of reconciling items         0.17     0.05    0.32    0.36
                                       -------------------------------
Operating EPS                          $0.91  $0.78(1) $ 1.50  $ 1.53
----------------------------------------------------------------------

(1) Operating EPS for 2Q06 does not sum due to rounding.


Supplemental Information:

The following supplemental information including geographical segment results, service type results, same office comparisons, and significant balance sheet ratios and other information is being provided for comparisons of reported results for second quarter Fiscal 2007 and 2006, first quarter Fiscal 2007, and / or second quarter Fiscal 2007 and 2006 year-to-date. All dollar amounts are in thousands unless noted otherwise.


Geographical Segment Results:

Management is presented with and reviews revenues, operating income, and adjusted operating income by geographical segment. Adjusted operating income is defined as operating income less reconciling items, including restructuring charges / severance costs, amortization of intangible assets on acquisitions, stock-based compensation expense, and asset write-up depreciation expense on acquisitions. See above for additional details provided by Management regarding adjusted financial information. Revenues, operating income, and adjusted operating income for North America, Europe, and All Other are presented below:

                       2Q07      1Q07      2Q06     2QYTD07   2QYTD06
----------------------------------------------------------------------
Revenues:
  North America      $231,297  $192,572  $146,754  $423,869  $283,615
  Europe               30,844    29,345    29,199    60,189    62,949
  All Other             9,184     8,478     9,097    17,662    17,768
                     -------------------------------------------------
  Total              $271,325  $230,395  $185,050  $501,720  $364,332

Operating income:
  North America      $ 18,937  $ 11,026  $ 16,537  $ 29,963  $ 28,396
  % of North America
   revenues               8.2%      5.7%     11.3%      7.1%     10.0%
  Europe             $  3,489  $  3,143  $  3,427  $  6,632  $  3,060
  % of Europe
   revenues              11.3%     10.7%     11.7%     11.0%      4.9%
  All Other          $  1,895  $  1,596  $  1,943  $  3,491  $  3,623
  % of All Other
   revenues              20.6%     18.8%     21.4%     19.8%     20.4%
                     -------------------------------------------------
  Total              $ 24,321  $ 15,765  $ 21,907  $ 40,086  $ 35,079
  % of Total revenues     9.0%      6.8%     11.8%      8.0%      9.6%

Reconciling items
 (pretax):
  North America      $  4,657  $  4,168  $  1,274  $  8,825  $  5,653
  Europe                   --        --        --        --     3,742
  All Other                --        --        --        --        --
                     -------------------------------------------------
  Total              $  4,657  $  4,168  $  1,274  $  8,825  $  9,395


Adjusted Operating
 Income:
  North America      $ 23,594  $ 15,194  $ 17,811  $ 38,788  $ 34,049
  % of North America
   revenues              10.2%      7.9%     12.1%      9.2%     12.0%
  Europe             $  3,489  $  3,143  $  3,427  $  6,632  $  6,802
  % of Europe
   revenues              11.3%     10.7%     11.7%     11.0%     10.8%
  All Other          $  1,895  $  1,596  $  1,943  $  3,491  $  3,623
  % of All Other
   revenues              20.6%     18.8%     21.4%     19.8%     20.4%
                     -------------------------------------------------
  Total              $ 28,978  $ 19,933  $ 23,181  $ 48,911  $ 44,474
  % of Total revenues    10.7%      8.7%     12.5%      9.7%     12.2%
----------------------------------------------------------------------

Service Type Results:

Management is presented with and reviews revenues and gross profit by service type. Revenues and gross profit information for Data Services, Voice Services, and Hotline Services are presented below:

                       2Q07      1Q07      2Q06     2QYTD07   2QYTD06
----------------------------------------------------------------------
Revenues:
  Data Services      $ 46,447  $ 44,531  $ 52,584  $ 90,978  $105,485
  Voice Services      169,815   133,639    78,410   303,454   151,339
  Hotline Services     55,063    52,225    54,056   107,288   107,508
                     -------------------------------------------------
  Total              $271,325  $230,395  $185,050  $501,720  $364,332

Gross profit:
  Data Services      $ 13,907  $ 13,317  $ 15,482  $ 27,224  $ 31,006
  % of Data Services
   revenues              29.9%     29.9%     29.4%     29.9%     29.4%
  Voice Services     $ 57,913  $ 45,763  $ 31,173  $103,676  $ 59,011
  % of Voice Services
   revenues              34.1%     34.2%     39.8%     34.2%     39.0%
  Hotline Services   $ 27,216  $ 26,764  $ 27,227  $ 53,980  $ 54,805
  % of Hotline
   Services revenues     49.4%     51.2%     50.4%     50.3%     51.0%
                     -------------------------------------------------
  Total              $ 99,036  $ 85,844  $ 73,882  $184,880  $144,822
  % of Total revenues    36.5%     37.3%     39.9%     36.8%     39.8%
----------------------------------------------------------------------

Same-office comparisons:

Management is presented with and reviews revenues on a same-office basis which excludes the effects of revenues from acquisitions since the earliest reported period thus allowing the comparison of same-office revenues from the earliest to current period under review. While the information provided below is presented on a consolidated basis, the revenue from acquisitions from second quarter Fiscal 2006 to second quarter Fiscal 2007 relates to North America Voice Services.


Information on revenues on a same-office basis compared to the same quarter last year is presented below:

                                            2Q07     2Q06    % Change
----------------------------------------------------------------------
Revenues as reported                     $271,325  $185,050        47%
Less revenues from offices added since
 2Q06                                     (99,775)   (5,062)
                                         -----------------------------
Revenues on same-office basis            $171,550  $179,998       (5)%
----------------------------------------------------------------------

Information on revenues on a same-office basis compared to the sequential quarter is presented below:

                                            2Q07      1Q07   % Change
----------------------------------------------------------------------
Revenues as reported                     $271,325  $230,395        18%
Less revenues from offices added since
 1Q07                                     (88,259)  (60,174)
                                         -----------------------------
Revenues on same-office basis            $183,066  $170,221         8%
----------------------------------------------------------------------

Significant balance sheet ratios and other information:

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

                               2Q07           1Q07           2Q06
----------------------------------------------------------------------

Accounts receivable:
  Gross accounts
   receivable             $200.1         $188.2         $139.5
  Reserve $ / %           $ 14.8 / 7.4%  $ 15.9 / 8.5%  $  7.7 / 5.5%
                          -------------- -------------- --------------
  Net accounts receivable $185.3         $172.3         $131.8

  Net days sales
   outstanding                  57 days         57 days        57 days

Inventory:
  Gross inventory         $ 96.8         $ 93.9         $ 66.6
  Reserve $ / %           $ 24.9 / 25.7% $ 25.7 / 27.4% $ 13.4 / 20.1%
                          -------------- -------------- --------------
  Net inventory           $ 71.9         $ 68.2         $ 53.2

  Net inventory turns        7.6x           7.2x           6.9x

Six-month order backlog   $165           $168           $104

Team members               4,649          4,752          3,282
----------------------------------------------------------------------

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

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