v2.3.0.11
Document and Entity Information (USD $)
3 Months Ended
Jul. 02, 2011
Aug. 05, 2011
Oct. 01, 2010
Document and Entity Information
Entity Registrant Name BLACK BOX CORP
Entity Central Index Key 0000849547
Document Type 10-Q
Document Period End Date Jul 2, 2011
Amendment Flag false
Document Fiscal Year Focus 2012
Document Fiscal Period Focus Q1
Current Fiscal Year End Date --03-31
Entity Current Reporting Status Yes
Entity Well Known Seasoned Issuer No
Entity Voluntary Filers No
Entity Filer Category Accelerated Filer
Entity Common Stock, Shares Outstanding 18,041,526
Entity Public Float $ 564,375,550
v2.3.0.11
Consolidated Balance Sheets (USD $)
In Thousands
Jul. 02, 2011
Mar. 31, 2011
Assets
Cash and cash equivalents $ 32,191 $ 31,212 [1]
Accounts receivable, net of allowance for doubtful accounts of $6,830 and $7,121 149,714 156,682 [1]
Inventories, net 58,758 52,014 [1]
Costs/estimated earnings in excess of billings on uncompleted contracts 107,036 103,853 [1]
Other assets 29,221 27,483 [1]
Total current assets 376,920 371,244 [1]
Property, plant and equipment, net 24,077 23,427 [1]
Goodwill 655,375 650,024 [1]
Intangibles, net 117,080 120,133 [1]
Other assets 5,460 7,155 [1]
Total assets 1,178,912 1,171,983 [1]
Liabilities
Accounts payable 82,299 71,463 [1]
Accrued compensation and benefits 24,186 35,329 [1]
Deferred revenue 34,022 36,043 [1]
Billings in excess of costs/estimated earnings on uncompleted contracts 19,311 17,462 [1]
Income taxes 11,205 11,957 [1]
Other liabilities 32,287 34,395 [1]
Total current liabilities 203,310 206,649 [1]
Long-term debt 173,040 181,127 [1]
Other liabilities 22,948 17,948 [1]
Total liabilities 399,298 405,724 [1]
Stockholders' Equity
Preferred stock authorized 5,000, par value $1.00, none issued 0 0 [1]
Common stock authorized 100,000, par value $.001, 18,042 and 17,918 shares outstanding, 25,730 and 25,561 shares issued 26 26 [1]
Additional paid-in capital 473,671 470,367 [1]
Retained earnings 608,284 599,923 [1]
Accumulated other comprehensive income 22,734 19,523 [1]
Treasury stock, at cost 7,688 and 7,643 shares (325,101) (323,580) [1]
Total stockholders’ equity 779,614 766,259 [1]
Total liabilities and stockholders’ equity $ 1,178,912 $ 1,171,983 [1]
[1] Derived from audited financial statements
v2.3.0.11
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Per Share data
Jul. 02, 2011
Mar. 31, 2011
Assets
Allowance for doubtful accounts $ 6,830 $ 7,121 [1]
Stockholders' Equity
Preferred stock, par value $ 1.00 $ 1.00 [1]
Preferred stock, shares authorized 5,000 5,000 [1]
Preferred stock, shares issued 0 0 [1]
Common stock, par value $ 0.001 $ 0.001 [1]
Common stock, shares authorized 100,000 100,000 [1]
Common stock, shares issued 25,730 25,561 [1]
Common stock, shares outstanding 18,042 17,918 [1]
Treasury stock, shares 7,688 7,643 [1]
[1] Derived from audited financial statements
v2.3.0.11
Consolidated Statements of Income (USD $)
In Thousands, except Per Share data
3 Months Ended
Jul. 02, 2011
Jul. 03, 2010
Revenues
Products $ 47,719 $ 46,049
On-Site services 220,707 217,547
Total 268,426 263,596
Cost of sales
Products 26,267 [1] 24,818 [1]
On-Site services 155,578 [1] 149,164 [1]
Total 181,845 [1] 173,982 [1]
Gross profit 86,581 89,614
Selling, general & administrative expenses 66,644 63,620
Intangibles amortization 3,059 3,102
Operating income 16,878 22,892
Interest expense (income), net 1,065 1,690
Other expenses (income), net 292 1
Income before provision for income taxes 15,521 21,201
Provision for income taxes 5,898 8,057
Net income $ 9,623 $ 13,144
Earnings per common share
Basic $ 0.54 $ 0.75
Diluted $ 0.53 $ 0.75
Weighted-average common shares outstanding
Basic 17,975 17,564
Diluted 18,145 17,597
Dividends per share $ 0.07 $ 0.06
[1] Exclusive of depreciation and intangibles amortization
v2.3.0.11
Consolidated Statements of Cash Flows (USD $)
In Thousands
3 Months Ended
Jul. 02, 2011
Jul. 03, 2010
Operating Activities
Net income $ 9,623 $ 13,144
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Intangibles amortization and depreciation 4,479 4,686
Loss (gain) on sale of property (17) (17)
Deferred taxes 2,701 2,263
Stock compensation expense 3,372 3,002
Change in fair value of interest-rate swaps (912) (532)
Changes in operating assets and liabilities (net of acquisitions)
Accounts receivable, net 7,513 (6,774)
Inventories, net (6,582) (2,103)
Costs/estimated earnings in excess of billings on uncompleted contracts (3,146) (14,111)
All other assets (621) (2,668)
Billings in excess of costs/estimated earnings on uncompleted contracts 1,842 4,372
All other liabilities (4,650) (14)
Net cash provided by (used for) operating activities 13,602 1,248
Investing Activities
Capital expenditures (2,036) (940)
Capital disposals 18 44
Acquisition of businesses (payments)/recoveries 0 0
Prior merger-related (payments)/recoveries (334) (1,683)
Net cash provided by (used for) investing activities (2,352) (2,579)
Financing Activities
Proceeds from borrowings 52,429 48,465
Repayment of borrowings (60,588) (49,367)
Deferred Financing Costs 0 0
Purchase of treasury stock (1,521) (482)
Proceeds from the exercise of stock options 0 78
Payment of dividends (1,075) (1,053)
Net cash provided by (used for) financing activities (10,755) (2,359)
Foreign currency exchange impact on cash 484 (240)
Increase / (decrease) in cash and cash equivalents 979 (3,930)
Cash and cash equivalents at beginning of period 31,212 [1] 20,885
Cash and cash equivalents at end of period 32,191 16,955
Supplemental Cash Flow
Cash paid for interest 1,945 2,236
Cash paid for income taxes 4,129 4,621
Non-cash financing activities
Dividends payable 1,262 1,056
Capital leases $ 0 $ 56
[1] Derived from audited financial statements
v2.3.0.11
Business and Basis of Presentation
3 Months Ended
Jul. 02, 2011
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business and Basis of Presentation
Business and Basis of Presentation


Business
Black Box Corporation ("Black Box" or the "Company") is a leading communications system integrator dedicated to designing, sourcing, implementing and maintaining today's complete communications solutions. The Company's primary service offering is voice communications solutions ("Voice Communications"); the Company also offers premise cabling and other data-related services ("Data Infrastructure") and technology product solutions (“Technology Products”). The Company provides 24/7/365 technical support for all its solutions, which encompass all major voice and data product manufacturers as well as an extensive range of technology products that it sells through its catalog and Internet Web site and its Voice Communications and Data Infrastructure (collectively referred to as "On-Site services") offices. As of July 2, 2011, the Company had more than 3,000 professional technical experts in 196 offices serving more than 175,000 clients in 141 countries throughout the world. Founded in 1976, Black Box, a Delaware corporation, operates subsidiaries on five continents and is headquartered near Pittsburgh in Lawrence, Pennsylvania.


Basis of Presentation
The accompanying unaudited interim consolidated financial statements of Black Box have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The Company believes that these consolidated financial statements reflect all normal, recurring adjustments needed to present fairly the Company’s results for the interim periods presented. The results as of and for interim periods may not be indicative of the results of operations for any other interim period or for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K as filed with the Securities and Exchange Commission ("SEC") for the fiscal year ended March 31, 2011 (the "Form 10-K").


The Company’s fiscal year ends on March 31. The fiscal quarters consist of 13 weeks and end on the Saturday generally nearest each calendar quarter end, adjusted to provide relatively equivalent business days for each fiscal quarter. The actual ending dates for the periods presented in these Notes to the Consolidated Financial Statements as of June 30, 2011 and 2010 were July 2, 2011 and July 3, 2010. References herein to "Fiscal Year" or "Fiscal" mean the Company’s fiscal year ended March 31 for the year referenced. All references to dollar amounts herein are presented in thousands, except per share amounts, unless otherwise noted.


The consolidated financial statements include the accounts of the parent company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain items in the consolidated financial statements of prior years have been reclassified to conform to the current year's presentation.


The preparation of financial statements in conformity with GAAP requires Company management ("Management") to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in these financial statements include project progress towards completion to estimated budget, allowances for doubtful accounts receivable, sales returns, net realizable value of inventories, loss contingencies, warranty reserves, intangible assets and goodwill. Actual results could differ from those estimates. Management believes the estimates made are reasonable.
v2.3.0.11
Significant Accounting Policies / Recent Accounting Pronouncements
3 Months Ended
Jul. 02, 2011
Significant Accounting Policies and Recent Accounting Pronouncements [Abstract]
Significant Accounting Policies
Significant Accounting Policies / Recent Accounting Pronouncements


Significant Accounting Policies
The significant accounting policies used in the preparation of the Company’s consolidated financial statements are disclosed in Note 2 of the Notes to the Consolidated Financial Statements within the Form 10-K. No additional significant accounting policies have been adopted during Fiscal 2012.


Recent Accounting Pronouncements
There have been no accounting pronouncements adopted during Fiscal 2012 that had a material impact on the Company's consolidated financial statements. There have been no new accounting pronouncements issued but not yet adopted that are expected to have a material impact on the Company's consolidated financial statements.


v2.3.0.11
Inventories
3 Months Ended
Jul. 02, 2011
Inventory Disclosure [Abstract]
Inventories
Inventories


The Company’s Inventories consist of the following:
 
June 30, 2011


March 31, 2011


Raw materials
$
1,343


$
1,294


Finished goods
77,488


70,579


Inventory, gross
78,831


71,873


Excess and obsolete inventory reserves
(20,073
)
(19,859
)
Inventory, net
$
58,758


$
52,014




v2.3.0.11
Goodwill
3 Months Ended
Jul. 02, 2011
Goodwill [Abstract]
Goodwill
Goodwill


The following table summarizes changes to Goodwill at the Company’s reportable segments for the periods presented:
 
North America


Europe


All Other


Total


Balance at March 31, 2011
$
574,964


$
72,752


$
2,308


$
650,024


Currency translation
(2
)
1,474


43


1,515


Current period acquisitions (see Note 9)








Prior period acquisitions (see Note 9)
3,836






3,836


Balance at June 30, 2011
$
578,798


$
74,226


$
2,351


$
655,375




At and since October 2, 2010 (the date of the Company's most recent annual goodwill impairment assessment), the Company's stock market capitalization has been lower than its net book value. However, each of the Company's reporting segments continues to operate profitably and generate significant cash flow from operations, and the Company expects that each will continue to do so throughout the remainder of Fiscal 2012 and beyond. In addition, the Company believes that a reasonable potential buyer would offer a control premium for the business that would adequately cover the difference between the recent stock trading prices and the net book value.




v2.3.0.11
Intangible Assets
3 Months Ended
Jul. 02, 2011
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Intangible Assets
Intangible Assets


The following table summarizes the gross carrying amount, accumulated amortization and net carrying amount by intangible asset class for the periods presented:
 
June 30, 2011
March 31, 2011
 
Gross Carrying Amount


Accum. Amort.


Net Carrying Amount


Gross Carrying Amount


Accum. Amort.


Net Carrying Amount


Definite-lived
 
 
 
 
 
 
Non-compete agreements
$
10,690


$
9,553


$
1,137


$
10,660


$
9,332


$
1,328


Customer relationships
126,367


38,163


88,204


126,367


35,301


91,066


Acquired backlog
17,349


17,349




17,349


17,349




Total
$
154,406


$
65,065


$
89,341


$
154,376


$
61,982


$
92,394


Indefinite-lived
 
 
 
 
 
 
Trademarks
35,992


8,253


27,739


35,992


8,253


27,739


Total
$
190,398


$
73,318


$
117,080


$
190,368


$
70,235


$
120,133




The Company’s indefinite-lived intangible assets consist solely of the Company’s trademark portfolio. The Company’s definite-lived intangible assets are comprised of employee non-compete agreements, customer relationships and backlog obtained through business acquisitions.




The following table summarizes the changes to the net carrying amounts of intangible assets for the periods presented:
 
Trademarks


Non-Competes and Backlog


Customer Relationships


Total


Balance at March 31, 2011
$
27,739


$
1,328


$
91,066


$
120,133


Amortization expense


(197
)
(2,862
)
(3,059
)
Currency translation


6




6


Current period acquisitions (see Note 9)








Balance at June 30, 2011
$
27,739


$
1,137


$
88,204


$
117,080




Intangibles amortization was $3,059 and $3,102 for the three (3) months ended June 30, 2011 and 2010, respectively.


The following table details the estimated intangibles amortization expense for the remainder of Fiscal 2012, each of the succeeding four (4) fiscal years and the periods thereafter. These estimates are based on the carrying amounts of intangible assets as of June 30, 2011 that are provisional measurements of fair value and are subject to change pending the outcome of purchase accounting related to certain acquisitions:
Fiscal
 
2012
$
9,080


2013
11,151


2014
9,966


2015
8,828


2016
8,557


Thereafter
41,759


Total
$
89,341


v2.3.0.11
Indebtedness
3 Months Ended
Jul. 02, 2011
Debt Disclosure [Abstract]
Indebtedness
Indebtedness


The Company’s Long-term debt consists of the following:
 
June 30, 2011


March 31, 2011


Revolving credit agreement
$
172,701


$
180,646


Other
999


1,213


Total debt
$
173,700


$
181,859


Less: current portion (included in Other liabilities)
(660
)
(732
)
Long-term debt
$
173,040


$
181,127




Revolving Credit Agreement
On January 30, 2008, the Company entered into a Third Amended and Restated Credit Agreement dated as of January 30, 2008 with Citizens Bank of Pennsylvania, as agent, and a group of lenders and, on October 8, 2010, the Company entered into the First Amendment to Credit Agreement primarily to permit the Company to make certain joint venture investments (as amended, the "Credit Agreement"). The Credit Agreement expires on January 30, 2013. Borrowings under the Credit Agreement are permitted up to a maximum amount of $350,000, which includes up to $20,000 of swing-line loans and $25,000 of letters of credit. The Credit Agreement may be increased by the Company up to an additional $100,000 with the approval of the lenders and may be unilaterally and permanently reduced by the Company to not less than the then outstanding amount of all borrowings. Interest on outstanding indebtedness under the Credit Agreement accrues, at the Company’s option, at a rate based on either: (a) the greater of (i) the prime rate per annum of the agent then in effect and (ii) 0.50% plus the rate per annum announced by the Federal Reserve Bank of New York as being the weighted-average of the rates on overnight Federal funds transactions arranged by Federal funds brokers on the previous trading day or (b) a rate per annum equal to the LIBOR rate plus 0.50% to 1.125% (determined by a leverage ratio based on the Company’s consolidated Earnings Before Interest Taxes Depreciation and Amortization ("EBITDA")). The Credit Agreement requires the Company to maintain compliance with certain non-financial and financial covenants such as leverage and fixed-charge coverage ratios. As of June 30, 2011, the Company was in compliance with all financial covenants under the Credit Agreement.


The maximum amount of debt outstanding under the Credit Agreement, the weighted-average balance outstanding under the Credit Agreement and the weighted-average interest rate on all outstanding debt for the three (3) months ended June 30, 2011 was $192,795, $179,824 and 1.1%, respectively, compared to $233,660, $219,773 and 1.3%, respectively, for the three (3) months ended June 30, 2010.


Other
Other debt is comprised of capital lease obligations primarily for equipment and other third-party, non-employee loans.


Unused available borrowings
As of June 30, 2011, the Company had $4,549 outstanding in letters of credit and $172,750 in unused commitments under the Credit Agreement.


v2.3.0.11
Derivative Instruments and Hedging Activities
3 Months Ended
Jul. 02, 2011
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Instruments and Hedging Activities
Derivative Instruments and Hedging Activities


The Company is exposed to certain market risks, including the effect of changes in foreign currency exchange rates and interest rates. The Company uses derivative instruments to manage financial exposures that occur in the normal course of business. It does not hold or issue derivatives for speculative trading purposes. The Company is exposed to non-performance risk from the counterparties in its derivative instruments. This risk would be limited to any unrealized gains on current positions. To help mitigate this risk, the Company transacts only with counterparties that are rated as investment grade or higher and all counterparties are monitored on a continuous basis. The fair value of the Company’s derivatives reflects this credit risk.


Foreign currency contracts
The Company enters into foreign currency contracts to hedge exposure to variability in expected fluctuations in foreign currencies. Foreign currency assets and liabilities are translated into U.S. dollars at the rate of exchange existing at the year-end date. Adjustments resulting from these translations are recorded in Accumulated Other Comprehensive Income ("AOCI") within the Company’s Consolidated Balance Sheets and will be included in income upon sale or liquidation of the foreign investment. As of June 30, 2011, the Company had open contracts in Australian and Canadian dollars, Danish krone, Euros, Mexican pesos, Norwegian kroner, British pounds sterling, Swedish krona, Swiss francs and Japanese yen which have been designated as cash flow hedges. These contracts had a notional amount of $43,407 and will expire within twelve (12) months. There was no hedge ineffectiveness during Fiscal 2012 or Fiscal 2011.


Interest-rate Swaps
On July 26, 2006, the Company entered into a five-year floating-to-fixed interest-rate swap that is based on a 3-month LIBOR rate versus a 5.44% fixed rate and has a notional value of $100,000 (which reduced to $50,000 as of June 26, 2009). On June 15, 2009, the Company entered into a three-year floating-to-fixed interest-rate swap that is based on a 3-month LIBOR rate versus a 2.28% fixed rate and has a notional value of $100,000 reducing to $50,000 after two (2) years. On May 19, 2011, the Company entered into a one-year floating-to-fixed interest-rate swap with an effective start date of July 26, 2011 that is based on a 3-month LIBOR rate versus a 0.58% fixed rate and has a notional value of $75,000. Each interest-rate swap discussed above does not qualify for hedge accounting and is, together with the other interest-rate swaps discussed above, collectively hereinafter referred to as the "interest-rate swaps."


The following tables detail the effect of derivative instruments on the Company’s Consolidated Balance Sheets and Consolidated Statements of Income for the periods presented:
 
 
Asset Derivatives
Liability Derivatives
 
Classification
June 30,

2011


March 31,

2011


June 30,

2011


March 31,

2011


Derivatives designated as hedging instruments
 


 


 


 


Foreign currency contracts
Other liabilities (current)
$


$


$
308


$
278


Foreign currency contracts
Other assets (current)
$
1,028


$
1,919


$


$


Derivatives not designated as hedging instruments
 


 


 


 


Interest-rate swaps
Other liabilities (current)
$


$


$
1,391


$
2,303


 
 
Three (3) months ended
 
 
June 30
 
Classification
2011


2010


Derivatives designated as hedging instruments
 
 


 


Gain (loss) recognized in Comprehensive income on (effective portion) – net of taxes
Other comprehensive income
$
(159
)
$
(345
)
(Gain) loss reclassified from AOCI into income (effective portion) – net of taxes
Selling, general &
administrative expenses
$
187


$
128


Derivatives not designated as hedging instruments
 
 
 
Gain (loss) recognized in income
Interest expense (income), net
$
912


$
532


v2.3.0.11
Fair Value Disclosures
3 Months Ended
Jul. 02, 2011
Fair Value Disclosures [Abstract]
Fair Value Disclosures
Fair Value Disclosures


Recurring fair value measurements
The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2011, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value:
 
Assets at Fair Value as of
 
June 30, 2011
 
Level 1


Level 2


Level 3


Total


Foreign currency contracts
$


$
1,028


$


$
1,028


 
Liabilities at Fair Value as of
 
June 30, 2011
 
Level 1


Level 2


Level 3


Total


Foreign currency contracts
$


$
308


$


$
308


Interest-rate swaps


1,391




1,391


Total
$


$
1,699


$


$
1,699




v2.3.0.11
Acquisitions
3 Months Ended
Jul. 02, 2011
Business Combinations [Abstract]
Acquisitions
Acquisitions


Fiscal 2012

There were no acquisitions during the first quarter of Fiscal 2012.


Fiscal 2011

During the third quarter of Fiscal 2011, the Company acquired LOGOS Communications Systems, Inc. ("Logos"), a privately-held company headquartered in Westlake, OH. Logos has an active client base which includes commercial, education and various local government agency accounts.


Also during the third quarter of Fiscal 2011, the Company acquired a non-controlling interest in Genesis Networks Integration Services, LLC, a new joint venture company which was formed in conjunction with Genesis Networks Enterprises, LLC ("Genesis"). This new joint venture company, based on Genesis’ existing Networks Integration Services Division, strengthens and enhances Genesis’ ability to deliver and support voice and data communications solutions to its enterprise clients.


The acquisition of Logos and the non-controlling interest in Genesis Networks Integration Services, LLC did not have a material impact on the Company’s consolidated financial statements.


The fair values of assets acquired and liabilities assumed for Logos are provisional and are based on the information that was available as of the acquisition date to estimate the fair value of assets acquired and liabilities assumed. The Company believes that the information available provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed but additional information not yet available is necessary to finalize those fair values. Thus, the provisional measurements of fair value are subject to change. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable but no later than one-year from the acquisition date.


The results of operations of Logos are included within the Company’s Consolidated Statements of Income beginning on the acquisition date.




v2.3.0.11
Income Taxes
3 Months Ended
Jul. 02, 2011
Income Tax Disclosure [Abstract]
Income Taxes
Income Taxes


The Company recorded income tax expense of $5,898, an effective tax rate of 38.0%, and $8,057, an effective tax rate of 38.0%, for the three (3) months ended June 30, 2011 and 2010, respectively. The effective rate for the three (3) months ended June 30, 2011 of 38.0% differs from the federal statutory rate primarily due to state income taxes and the write-off of certain deferred tax assets related to equity awards partially offset by the reduction of uncertain income tax positions (including interest and penalties) and foreign earnings taxed at a lower statutory rate.


The Company provides for income taxes at the end of each interim period based on the estimated effective tax rate for the full fiscal year. Cumulative adjustments to the Company’s estimate are recorded in the interim period in which a change in the estimated annual effective rate is determined.


During Fiscal 2012 and Fiscal 2011, the Internal Revenue Service ("IRS") commenced an examination of the Company's U.S. federal income tax returns for Fiscal 2010, Fiscal 2009 and Fiscal 2008. In connection with these normal recurring audits, the IRS has requested certain documentation. The Company has produced various documents requested by the IRS and is currently in the process of responding to additional documentation requests.


Fiscal 2007 through Fiscal 2010 remain open to examination by state and foreign taxing jurisdictions.


v2.3.0.11
Stock-based Compensation
3 Months Ended
Jul. 02, 2011
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-based Compensation
Stock-based Compensation


In August 2008, the Company’s stockholders approved the 2008 Long-Term Incentive Plan (the "Incentive Plan") which replaces the 1992 Stock Option Plan, as amended, and the 1992 Director Stock Option Plan, as amended. As of June 30, 2011, the Incentive Plan is authorized to issue stock options, restricted stock units and performance shares, among other types of awards, for up to 2,587,981 shares of common stock, par value $.001 per share (the "common stock").


The Company recognized stock-based compensation expense of $3,372 and $3,002 for the three (3) months ended June 30, 2011 and 2010, respectively. The Company recognized total income tax benefit for stock-based compensation arrangements of $1,237 and $1,098 for the three (3) months ended June 30, 2011 and 2010, respectively. Stock-based compensation expense is recorded in Selling, general & administrative expense within the Company’s Consolidated Statements of Income.


Stock options
Stock option awards are granted with an exercise price equal to the closing market price of the common stock on the date of grant; such stock options generally become exercisable in equal amounts over a three-year period and have a contractual life of ten (10) years from the grant date. The fair value of stock options is estimated on the grant date using the Black-Scholes option pricing model which includes the following weighted-average assumptions.
 
Three (3) months ended
 
June 30
 
2011


2010


Expected life (in years)
4.8


4.9


Risk free interest rate
1.7
%
2.3
%
Annual forfeiture rate
2.1
%
2.1
%
Volatility
45.3
%
41.4
%
Dividend yield
0.7
%
0.8
%


The following table summarizes the Company’s stock option activity for the period presented and as of June 30, 2011:
 
Shares (in 000’s)


Weighted-Average Exercise Price


Weighted-Average Remaining Contractual Life (Years)


Intrinsic Value (000’s)


Outstanding at March 31, 2011
2,901


$
35.65


 
 
Granted
180


32.39


 
 
Exercised




 
 
Forfeited or expired
(2
)
44.46


 
 
Outstanding at June 30, 2011
3,079


$
35.45


5.1


$
2,184


Exerciseable at June 30, 2011
2,685


$
35.90


4.5


$
2,184




The weighted-average grant-date fair value of options granted during the three (3) months ended June 30, 2011 and 2010 was $12.42 and $11.69, respectively. The total intrinsic value of options exercised during the three (3) months ended June 30, 2011 and 2010 was $0 and $4, respectively. The aggregate intrinsic value in the preceding table is based on the closing stock price of the common stock on July 1, 2011 of $31.76.


The following table summarizes certain information regarding the Company’s non-vested stock options for the period presented:
 
Shares (in 000’s)


Weighted-Average Grant-Date Fair Value


Non-vested at March 31, 2011
690


$
10.32


Granted
180


12.42


Forfeited




Vested
(476
)
9.61


Non-vested at June 30, 2011
394


$
12.14




As of June 30, 2011, there was $4,287 of total unrecognized pre-tax stock-based compensation expense related to non-vested stock options which is expected to be recognized over a weighted-average period of 2.2 years.




Restricted stock units
Restricted stock unit awards are subject to a service condition and generally vest in equal amounts over a three-year period from the grant date. The fair value of restricted stock units is determined based on the number of restricted stock units granted and the closing market price of the common stock on the date of grant.


The following table summarizes the Company’s restricted stock unit activity for the period presented:
 
Shares (in 000’s)


Weighted-Average Grant-Date Fair Value


Outstanding at March 31, 2011
248


$
29.97


Granted
163


32.39


Vested
(117
)
30.19


Forfeited




Outstanding at June 30, 2011
294


$
31.22




The total fair value of shares that vested during the three (3) months ended June 30, 2011 and 2010 was $3,553 and $1,985, respectively.


As of June 30, 2011, there was $8,218 of total unrecognized pre-tax stock-based compensation expense related to non-vested restricted stock units which is expected to be recognized over a weighted-average period of 2.2 years.




Performance share awards
Performance share awards are subject to certain performance goals including the Company’s Relative Total Shareholder Return ("TSR") Ranking and cumulative Adjusted EBITDA over a three (3) year period. The Company’s Relative TSR Ranking metric is based on the three (3) year cumulative return to shareholders from the change in stock price and dividends paid between the starting and ending dates. The fair value of performance share awards (subject to cumulative Adjusted EBITDA) is determined based on the number of performance shares granted and the closing market price of the common stock on the date of grant. The fair value of performance share awards (subject to the Company’s Relative TSR Ranking) is estimated on the grant date using the Monte-Carlo simulation which includes the following weighted-average assumptions.
 
Three (3) months ended
 
June 30
 
2011


2010


Expected Volatility
50.8
%
52.3
%
Risk free interest rate
0.9
%
1.4
%
Dividend yield
0.7
%
0.8
%


The following table summarizes the Company’s performance share award activity for the period presented:
 
Shares (in 000’s)


Weighted-Average Grant-Date Fair Value


Outstanding at March 31, 2011
179


$
33.13


Granted
110


34.15


Vested
(52
)
30.87


Forfeited
(50
)
35.23


Outstanding at June 30, 2011
187


$
33.77




The total fair value of shares that vested during the three (3) months ended June 30, 2011 and 2010 was $1,679 and $0, respectively.


As of June 30, 2011, there was $5,192 of total unrecognized pre-tax stock-based compensation expense related to non-vested performance share awards which is expected to be recognized over a weighted-average period of 2.5 yea
v2.3.0.11
Earnings Per Share
3 Months Ended
Jul. 02, 2011
Earnings Per Share [Abstract]
Earnings Per Share
Earnings Per Share


The following table details the computation of basic and diluted earnings per common share from continuing operations for the periods presented (share numbers in thousands):
 
Three (3) months ended
 
June 30
 
2011


2010


Net income
$
9,623


$
13,144


Weighted-average common shares outstanding (basic)
17,975


17,564


Effect of dilutive securities from equity awards
170


33


Weighted-average common shares outstanding (diluted)
18,145


17,597


Basic earnings per common share
$
0.54


$
0.75


Dilutive earnings per common share
$
0.53


$
0.75


 
 
 


The Weighted-average common shares outstanding (diluted) computation is not impacted during any period where the exercise price of a stock option is greater than the average market price. There were 2,362,433 and 3,714,947 non-dilutive equity awards outstanding for the three (3) months ended June 30, 2011 and 2010, respectively, that are not included in the corresponding period Weighted-average common shares outstanding (diluted) computation.
v2.3.0.11
Comprehensive Income and AOCI
3 Months Ended
Jul. 02, 2011
Comprehensive Income and AOCI [Abstract]
Comprehensive Income and AOCI
Comprehensive income and AOCI


The following table details the computation of comprehensive income for the periods presented:
 
Three (3) months ended
 
June 30
 
2011


2010


Net income
$
9,623


$
13,144


Foreign currency translation adjustment
3,119


(6,346
)
Derivative instruments (net of tax)
 
 
Net change in fair value of cash flow hedging instruments (net of tax)
(159
)
(345
)
Amounts reclassified into results of operations
187


128


Pension (net of tax)
 
 
Unrealized gain (loss)
4


5


Amounts reclassified into results of operations
60


35


Other comprehensive income (loss)
$
3,211


$
(6,523
)
Comprehensive income (loss)
$
12,834


$
6,621


 
 
 


The components of AOCI consisted of the following for the periods presented:
 
June 30, 2011


March 31, 2011


Foreign currency translation adjustment
$
27,033


$
23,914


Unrealized gains (losses) on derivatives designated and qualified as cash flow hedges
(136
)
(164
)
Unrecognized gain (losses) on defined benefit pension
(4,163
)
(4,227
)
Accumulated other comprehensive income
$
22,734


$
19,523




v2.3.0.11
Segment Reporting
3 Months Ended
Jul. 02, 2011
Segment Reporting [Abstract]
Segment Reporting
Segment Reporting


Management reviews financial information for the consolidated Company accompanied by disaggregated information on revenues, operating income and assets by geographic region for the purpose of making operational decisions and assessing financial performance. Additionally, Management is presented with and reviews revenues and gross profit by service type. The accounting policies of the individual operating segments are the same as those of the Company.




The following table presents financial information about the Company’s reportable segments by geographic region for the periods presented:
 
Three (3) months ended
 
June 30
 
2011


2010


North America
 
 
Revenues
$
233,337


$
230,484


Operating income
13,986


19,167


Depreciation
1,288


1,470


Intangibles amortization
3,049


3,093


Assets (as of June 30)
1,081,123


1,045,825


Europe
 
 
Revenues
$
26,354


$
24,942


Operating income
2,278


2,336


Depreciation
100


78


Intangibles amortization
9


8


Assets (as of June 30)
129,934


121,576


All Other
 
 
Revenues
$
8,735


$
8,170


Operating income
614


1,389


Depreciation
32


36


Intangibles amortization
1


1


Assets (as of June 30)
27,834


22,781




The sum of the segment revenues, operating income, depreciation and intangibles amortization equals the consolidated revenues, operating income, depreciation and intangibles amortization. The following table reconciles segment assets to total consolidated assets as of June 30, 2011 and 2010:
 
June 30
 
2011


2010


Segment assets for North America, Europe and All Other
$
1,238,891


$
1,190,182


Corporate eliminations
(59,979
)
(54,741
)
Total consolidated assets
$
1,178,912


$
1,135,441




The following table presents financial information about the Company by service type for the periods presented:
 
Three (3) months ended
 
June 30
 
2011


2010


Data Infrastructure
 
 
Revenues
$
62,381


$
53,957


Gross profit
15,648


14,350


Voice Communications
 
 
Revenues
$
158,326


$
163,590


Gross profit
49,481


54,033


Technology Products
 
 
Revenues
$
47,719


$
46,049


Gross profit
21,452


21,231




The sum of service type revenues and gross profit equals consolidated revenues and gross profit.


v2.3.0.11
Commitments and Contingencies
3 Months Ended
Jul. 02, 2011
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies
Commitments and Contingencies


The Company is involved in, or has pending, various legal proceedings, claims, suits and complaints arising out of the normal course of business. Based on the facts currently available to the Company, Management believes these matters are adequately provided for, covered by insurance, without merit or not probable that an unfavorable outcome will result.


There has been no other significant or unusual activity during Fiscal 2012.