Tuesday, October 31, 2006
Black Box Corporation Reports Second Quarter and Year-To-Date Fiscal 2007 Results
View Details
- 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)%
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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%
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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
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Investor Contact:
Mike McAndrew
Chief Financial Officer
Black Box Corporation
724-873-6788
E-mail: investors@blackbox.com