v2.4.0.6
Document and Entity Information (USD $)
9 Months Ended
Dec. 31, 2011
Feb. 03, 2012
Oct. 01, 2011
Document and Entity Information      
Entity Registrant Name BLACK BOX Corporation    
Entity Central Index Key 0000849547    
Document Type 10-Q    
Document Period End Date Dec. 31, 2011    
Amendment Flag false    
Document Fiscal Year Focus 2012    
Document Fiscal Period Focus Q3    
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   17,480,326  
Entity Public Float     $ 375,118,048
v2.4.0.6
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Mar. 31, 2011
Assets    
Cash and cash equivalents $ 25,459 $ 31,212 [1]
Accounts receivable, net of allowance for doubtful accounts of $6,170 and $7,121 169,923 156,682 [1]
Inventories, net 61,469 52,014 [1]
Costs/estimated earnings in excess of billings on uncompleted contracts 102,647 103,853 [1]
Other assets 25,077 27,483 [1]
Total current assets 384,575 371,244
Property, plant and equipment, net 24,441 23,427 [1]
Goodwill 339,388 650,024 [1]
Intangibles, net 116,437 120,133 [1]
Other assets 24,335 7,155 [1]
Total assets 889,176 1,171,983
Liabilities    
Accounts payable 81,010 71,463 [1]
Accrued compensation and benefits 28,465 35,329 [1]
Deferred revenue 35,434 36,043 [1]
Billings in excess of costs/estimated earnings on uncompleted contracts 16,755 17,462 [1]
Income taxes 16,124 11,957 [1]
Other liabilities 37,094 34,395 [1]
Total current liabilities 214,882 206,649
Long-term debt 173,735 181,127 [1]
Other liabilities 15,372 17,948 [1]
Total liabilities 403,989 405,724
Stockholders' Equity    
Preferred stock authorized 5,000, par value $1.00, none issued 0 0 [1]
Common stock authorized 100,000, par value $.001, 17,480 and 17,918 shares outstanding, 25,730 and 25,561 issued 26 26 [1]
Additional paid-in capital 476,951 470,367 [1]
Retained earnings 337,224 599,923 [1]
Accumulated other comprehensive income 9,858 19,523 [1]
Treasury stock, at cost 8,250 and 7,643 shares (338,872) (323,580) [1]
Total stockholders’ equity 485,187 766,259
Total liabilities and stockholders’ equity $ 889,176 $ 1,171,983
[1] Derived from audited financial statements
v2.4.0.6
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Per Share data, unless otherwise specified
Dec. 31, 2011
Mar. 31, 2011
Assets    
Allowance for doubtful accounts $ 6,170 $ 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]
Preferred stock, shares outstanding 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 17,480 17,918 [1]
Treasury stock, shares 8,250 7,643 [1]
[1] Derived from audited financial statements
v2.4.0.6
Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Dec. 31, 2011
Jan. 01, 2011
Dec. 31, 2011
Jan. 01, 2011
Revenues        
Products $ 51,379 $ 49,545 $ 149,427 $ 142,009
On-Site services 224,560 227,134 682,109 671,190
Total 275,939 276,679 831,536 813,199
Cost of sales        
Products 29,088 [1] 26,987 [1] 83,015 [1] 76,823 [1]
On-Site services 158,538 [1] 159,040 [1] 484,761 [1] 465,990 [1]
Total 187,626 186,027 567,776 542,813
Gross profit 88,313 90,652 263,760 270,386
Selling, general & administrative expenses 62,644 64,296 192,544 191,450
Goodwill impairment loss 317,797 0 317,797 0
Intangibles amortization 3,249 2,901 9,484 9,061
Operating income (loss) (295,377) 23,455 (256,065) 69,875
Interest expense (income), net 1,856 1,028 3,690 4,460
Other expenses (income), net 311 (11) 876 (76)
Income (loss) before provision (benefit) for income taxes (297,544) 22,438 (260,631) 65,491
Provision (benefit) for income taxes (14,101) 8,528 (1,655) 24,887
Net income (loss) $ (283,443) $ 13,910 $ (258,976) $ 40,604
Earnings (loss) per common share        
Basic $ (16.12) $ 0.79 $ (14.54) $ 2.31
Diluted $ (16.12) $ 0.78 $ (14.54) $ 2.30
Weighted-average common shares outstanding        
Basic 17,581 17,703 17,806 17,611
Diluted 17,581 17,940 17,806 17,675
Dividends per share $ 0.07 $ 0.06 $ 0.21 $ 0.18
[1] Exclusive of depreciation and intangibles amortization
v2.4.0.6
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Dec. 31, 2011
Jan. 01, 2011
Operating Activities    
Net income (loss) $ (258,976) $ 40,604
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities    
Intangibles amortization and depreciation 13,581 13,672
Loss (gain) on sale of property (166) (67)
Deferred taxes (22,597) 6,574
Stock compensation expense 7,505 7,999
Change in fair value of interest-rate swaps (801) (1,920)
Goodwill impairment loss 317,797 0
Changes in operating assets and liabilities (net of acquisitions)    
Accounts receivable, net (11,173) (9,161)
Inventories, net (9,848) (2,320)
Costs/estimated earnings in excess of billings on uncompleted contracts 1,535 (25,012)
All other assets 2,404 (972)
Billings in excess of costs/estimated earnings on uncompleted contracts (749) 4,723
All other liabilities 5,362 1,952
Net cash provided by (used for) operating activities 43,874 36,072
Investing Activities    
Capital expenditures (4,973) (2,906)
Capital disposals 187 98
Acquisition of businesses (payments)/recoveries (13,954) (12,811)
Prior merger-related (payments)/recoveries (1,174) (1,829)
Net cash provided by (used for) investing activities (19,914) (17,448)
Financing Activities    
Proceeds from borrowings 183,243 174,815
Repayment of borrowings (190,909) (187,636)
Deferred financing costs 0 (700)
Purchase of treasury stock (15,292) (483)
Proceeds from the exercise of stock options 0 4,712
Payment of dividends (3,574) (3,166)
Net cash provided by (used for) financing activities (26,532) (12,458)
Foreign currency exchange impact on cash (3,181) 909
Increase / (decrease) in cash and cash equivalents (5,753) 7,075
Cash and cash equivalents at beginning of period 31,212 [1] 20,885
Cash and cash equivalents at end of period 25,459 27,960
Supplemental Cash Flow    
Cash paid for interest 5,126 6,460
Cash paid for income taxes 16,831 17,040
Non-cash financing activities    
Dividends payable 1,224 1,066
Capital leases $ 23 $ 121
[1] Derived from audited financial statements
v2.4.0.6
Business and Basis of Presentation
9 Months Ended
Dec. 31, 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 complex 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 December 31, 2011, the Company had more than 3,000 professional technical experts in 198 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 December 31, 2011 and 2010 were December 31, 2011 and January 1, 2011. 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.
v2.4.0.6
Significant Accounting Policies / Recent Accounting Pronouncements
9 Months Ended
Dec. 31, 2011
Accounting Policies [Abstract]  
Significant Accounting Policies / Recent Accounting Pronouncements
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.
v2.4.0.6
Inventories
9 Months Ended
Dec. 31, 2011
Inventory Disclosure [Abstract]  
Inventories
Inventories

The Company’s Inventories consist of the following:
 
December 31, 2011

March 31, 2011

Raw materials
$
1,299

$
1,294

Finished goods
79,661

70,579

Inventory, gross
80,960

71,873

Excess and obsolete inventory reserves
(19,491
)
(19,859
)
Inventory, net
$
61,469

$
52,014


v2.4.0.6
Goodwill
9 Months Ended
Dec. 31, 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

Goodwill (gross) at March 31, 2011
$
574,964

$
72,752

$
2,308

$
650,024

Accumulated impairment losses at March 31, 2011




Goodwill (net) at March 31, 2011
$
574,964

$
72,752

$
2,308

$
650,024

 
 
 
 
 
Currency translation
2

(4,267
)
(165
)
(4,430
)
Current period acquisitions (see Note 9)
8,021



8,021

Prior period acquisitions (see Note 9)
3,570



3,570

Impairment loss 1
(277,364
)
(40,433
)

(317,797
)
 
 
 
 
 
Goodwill (gross) at December 31, 2011
$
586,557

$
68,485

$
2,143

$
657,185

Accumulated impairment losses at December 31, 2011
(277,364
)
(40,433
)

(317,797
)
Goodwill (net) at December 31, 2011
$
309,193

$
28,052

$
2,143

$
339,388

1 The goodwill impairment loss of $277,364 in North America includes $232 of impairment loss that is recorded in North America but relates to Europe.

As previously disclosed, the Company, after consultation by Management with the Audit Committee of the Board of Directors, recorded a non-cash, pre-tax goodwill impairment charge of $317,797 during the third quarter of Fiscal 2012 as a result of its annual goodwill assessment conducted as of October 1, 2011. The Company does not expect the impairment charge to impact its business operations, compliance with debt covenants or future cash flows, or to result in any current or future cash expenditures.

Beginning in 1998 and continuing through the present time, the Company has pursued a strategy to expand its technical capabilities and geographic footprint to include Data Infrastructure and Voice Communications solutions in North America and Data Infrastructure solutions in Europe by acquiring over one hundred companies that resulted in recording goodwill on its balance sheet. The North America and Europe reporting units continue to operate profitably and generate positive cash flow from operations, and the Company expects that each will continue to do so in Fiscal 2012 and beyond. However, the current fair value, derived from a discounted cash flow model, of the North America and Europe reporting units do not support the book value of goodwill recorded from those acquisitions. The primary factors contributing to the difference in fair value to book value were an increased weighted-average cost of capital for North America (primarily driven by an increase in the risk premium associated with the Company's industry segment relative to a control group) and lower profitability as a result of competitive market conditions for both North America and Europe.

In determining the impairment charge, the implied fair value of the reporting unit goodwill was compared to the carrying amount of the goodwill. The implied fair value of reporting unit goodwill was determined as the residual between the fair value of the reporting unit and the fair value of its assets (including any unrecognized intangible assets) and liabilities as of the annual goodwill assessment date.

At December 31, 2011, the Company's stock market capitalization was comparable with net book value. Each of the Company's reporting units continues to operate profitably and generate cash flow from operations, and the Company expects that each will continue to do so in Fiscal 2012 and beyond. The Company also 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 book value.

Future events that could result in an interim assessment of goodwill impairment and/or a potential impairment loss include, but are not limited to, (i) significant underperformance relative to historical or projected future operating results, (ii) significant changes in the manner of or use of the assets or the strategy for the Company's overall business, (iii) significant negative industry or economic trends, (iv) a decline in market capitalization below book value and (v) a modification to the Company's reporting segments. Management is currently considering alternative reporting segments for the purpose of making operational decisions and assessing financial performance. This contemplated change in reporting segments would affect the reporting units currently being used in the Company's annual goodwill impairment assessment. Any such change could result in an impairment charge which could have a material adverse effect on the results of operations for the period in which the impairment occurs.
v2.4.0.6
Intangible Assets
9 Months Ended
Dec. 31, 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:
 
December 31, 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
$
11,785

$
9,852

$
1,933

$
10,660

$
9,332

$
1,328

Customer relationships
130,890

44,125

86,765

126,367

35,301

91,066

Acquired backlog
17,349

17,349


17,349

17,349


Total
$
160,024

$
71,326

$
88,698

$
154,376

$
61,982

$
92,394

Indefinite-lived
 
 
 
 
 
 
Trademarks
35,992

8,253

27,739

35,992

8,253

27,739

Total
$
196,016

$
79,579

$
116,437

$
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

(660
)
(8,824
)
(9,484
)
Currency translation

(1
)

(1
)
Current period acquisitions (see Note 9)

1,266

4,523

5,789

Balance at December 31, 2011
$
27,739

$
1,933

$
86,765

$
116,437


Intangibles amortization was $3,249 and $2,901 for the three (3) months ended December 31, 2011 and 2010, respectively, and $9,484 and $9,061 for the nine (9) months ended December 31, 2011 and 2010, respectively. The Company acquired definite-lived intangibles from the completion of several acquisitions during Fiscal 2011 and 2010.

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 December 31, 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
$
3,196

2013
11,966

2014
10,785

2015
9,646

2016
9,375

Thereafter
43,730

Total
$
88,698

v2.4.0.6
Indebtedness
9 Months Ended
Dec. 31, 2011
Debt Disclosure [Abstract]  
Indebtedness
Indebtedness

The Company’s Long-term debt consists of the following:
 
December 31, 2011

March 31, 2011

Revolving credit agreement
$
173,560

$
180,646

Other
656

1,213

Total debt
$
174,216

$
181,859

Less: current portion (included in Other liabilities)
(481
)
(732
)
Long-term debt
$
173,735

$
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 December 31, 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 December 31, 2011 was $214,045, $203,457 and 1.1%, respectively, compared to $222,000, $212,871 and 1.2%, respectively, for the three (3) months ended December 31, 2010. 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 nine (9) months ended December 31, 2011 was $216,180, $195,604 and 1.1%, respectively, compared to $237,255, $219,389 and 1.3%, respectively, for the nine (9) months ended December 31, 2010.

Unused available borrowings
As of December 31, 2011, the Company had $4,606 outstanding in letters of credit and $171,834 in unused commitments under the Credit Agreement.
v2.4.0.6
Derivative Instruments and Hedging Activities
9 Months Ended
Dec. 31, 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 period-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 December 31, 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 $56,533 and will expire within twelve (12) months. There was no hedge ineffectiveness during Fiscal 2012 or Fiscal 2011.

Interest-rate Swaps
On May 24, 2006, the Company entered into a five-year floating-to-fixed interest-rate swap, with an effective date of July 26, 2006, 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 July 26, 2009 and terminated on July 26, 2011). On June 15, 2009, the Company entered into a three-year floating-to-fixed interest-rate swap, with an effective date of July 27, 2009, that is based on a 3-month LIBOR rate versus a 2.28% fixed rate and has a notional value of $100,000 (which reduced to $50,000 on July 27, 2011). On May 19, 2011, the Company entered into a one-year floating-to-fixed interest-rate swap, with an effective 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. On November 15, 2011, the Company entered into a three-year floating-to-fixed interest-rate swap, with an effective start date of July 26, 2012, that is based on a 3-month LIBOR rate versus a 1.25% fixed rate and has a notional value of $125,000. As of December 31, 2011, $125,000 of the total variable debt outstanding under the Credit Agreement was effectively converted to a fixed-rate through the interest rate swaps noted above. 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 Operations for the periods presented:
 
 
Asset Derivatives
Liability Derivatives
 
Classification
December 31,
2011

March 31,
2011

December 31,
2011

March 31,
2011

Derivatives designated as hedging instruments
 

 

 

 

Foreign currency contracts
Other liabilities (current)
$

$

$
2,672

$
278

Foreign currency contracts
Other assets (current)
$
215

$
1,919

$

$

Derivatives not designated as hedging instruments
 

 

 

 

Interest-rate swaps
Other liabilities (current)
$

$

$
1,502

$
2,303

 
 
Three (3) months ended
Nine (9) months ended
 
 
December 31
December 31
 
Classification
2011

2010

2011

2010

Derivatives designated as hedging instruments
 

 

 
 
Gain (loss) recognized in Comprehensive income on (effective portion) – net of taxes
Other comprehensive income
$
(230
)
$
360

$
(57
)
$
(92
)
(Gain) loss reclassified from AOCI into income (effective portion) – net of taxes
Selling, general &
administrative expenses
$
(102
)
$
89

$
110

$
407

Derivatives not designated as hedging instruments
 
 




Gain (loss) recognized in income
Interest expense (income), net
$
(715
)
$
1,074

$
801

$
1,920

v2.4.0.6
Fair Value Disclosures
9 Months Ended
Dec. 31, 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 December 31, 2011, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value:
 
Assets at Fair Value as of
 
December 31, 2011
 
Level 1

Level 2

Level 3

Total

Foreign currency contracts
$

$
215

$

$
215

 
Liabilities at Fair Value as of
 
December 31, 2011
 
Level 1

Level 2

Level 3

Total

Foreign currency contracts
$

$
2,672

$

$
2,672

Interest-rate swaps

1,502


1,502

Total
$

$
4,174

$

$
4,174


Non-recurring fair value measurements
The Company's assets and liabilities that are measured at fair value on a non-recurring basis include non-financial assets and liabilities initially measured at fair value in a business combination and Goodwill. As disclosed in Note 9, the Company completed an acquisition during the nine (9) months ended December 31, 2011 which included operating assets, liabilities and certain intangible assets. The Company utilized level 2 and level 3 inputs to measure the fair value of these items.
v2.4.0.6
Acquisitions
9 Months Ended
Dec. 31, 2011
Business Combinations [Abstract]  
Acquisitions
Acquisitions

Fiscal 2012
During the second quarter of Fiscal 2012, the Company acquired PS Technologies, LLC ("PS Tech"), a privately-held company headquartered in Dayton, OH. PS Tech is the first Black Box acquisition in the rapidly-growing enterprise video communications market and services clients in the healthcare and government verticals.

The acquisition of PS Tech did not have a material impact on the Company’s consolidated financial statements.

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 PS Tech 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 PS Tech and Logos are included within the Company’s Consolidated Statements of Operations beginning on the acquisition date.
v2.4.0.6
Income Taxes
9 Months Ended
Dec. 31, 2011
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

The Company's benefit for income taxes was $14,101, an effective tax rate of 4.7% on loss before benefit for income taxes of $297,544, and provision for income taxes was $8,528, an effective tax rate of 38.0% on income before provision for income taxes of $22,438, for the three (3) months ended December 31, 2011 and 2010, respectively, and benefit for income taxes was $1,655, an effective tax rate of 0.6% on loss before benefit for income taxes of $260,631, and provision for income taxes was $24,887, an effective tax rate of 38.0% on income before provision for income taxes of $65,491, for the nine (9) months ended December 31, 2011 and 2010, respectively. The effective rate for the nine (9) months ended December 31, 2011 of 0.6% differs from the federal statutory rate primarily due to $262,703 of non-deductible goodwill impairment loss (see Note 4) and a $1,579 reduction in the Company's income taxes related to an agreement with the Internal Revenue Service ("IRS") in the second quarter of Fiscal 2012 to conclude the previously-disclosed IRS audit for Fiscal 2007 through Fiscal 2010.

The Company provides for income taxes at the end of each interim period based on the estimated effective tax rate adjusted for certain discreet items (see above for non-deductibility of goodwill and for the $1,579 income tax reduction during the second quarter of Fiscal 2012 related to a previously-disclosed IRS audit) 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.

Fiscal 2007 through Fiscal 2010 remain open to examination by state and foreign taxing jurisdictions.
v2.4.0.6
Stock-based Compensation
9 Months Ended
Dec. 31, 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 December 31, 2011, the Incentive Plan is authorized to issue stock options, restricted stock units and performance shares, among other types of awards, for up to 2,822,824 shares of common stock, par value $.001 per share (the "common stock").

The Company recognized stock-based compensation expense of $2,087 and $2,493 for the three (3) months ended December 31, 2011 and 2010, respectively, $7,505 and $7,999 for the nine (9) months ended December 31, 2011 and 2010, respectively. The Company recognized total income tax benefit for stock-based compensation arrangements of $766 and $911 for the three (3) months ended December 31, 2011 and 2010, respectively, and $2,754 and $2,925 for the nine (9) months ended December 31, 2011 and 2010, respectively. Stock-based compensation expense is recorded in Selling, general & administrative expense within the Company’s Consolidated Statements of Operations.

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.
 
Nine (9) months ended
 
December 31
 
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 December 31, 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
(236
)
41.64

 
 
Outstanding at December 31, 2011
2,845

$
34.94

5.0

$

Exercisable at December 31, 2011
2,453

$
35.35

4.4

$


The weighted-average grant-date fair value of options granted during the nine (9) months ended December 31, 2011 and 2010 was $12.42 and $11.69, respectively. The total intrinsic value of options exercised during the nine (9) months ended December 31, 2011 and 2010 was $0 and $1,035, respectively. The aggregate intrinsic value in the preceding table is based on the closing stock price of the common stock on December 30, 2011 of $28.04.

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
(478
)
9.62

Non-vested at December 31, 2011
392

$
12.14


As of December 31, 2011, there was $3,150 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 1.7 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
(118
)
30.19

Forfeited
(8
)
31.08

Outstanding at December 31, 2011
285

$
31.23


The total fair value of shares that vested during the nine (9) months ended December 31, 2011 and 2010 was $3,553 and $1,985, respectively.

As of December 31, 2011, there was $5,868 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 1.7 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.
 
Nine (9) months ended
 
December 31
 
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 December 31, 2011
187

$
33.77


The total fair value of shares that vested during the nine (9) months ended December 31, 2011 and 2010 was $1,679 and $0, respectively.

As of December 31, 2011, there was $3,805 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 2.0 years.
v2.4.0.6
Earnings (loss) Per Share
9 Months Ended
Dec. 31, 2011
Earnings Per Share [Abstract]  
Earnings (loss) Per Share
Earnings (loss) Per Share

The following table details the computation of basic and diluted earnings (loss) per common share from continuing operations for the periods presented (share numbers in thousands):
 
Three (3) months ended
Nine (9) months ended
 
December 31
December 31
 
2011

2010

2011

2010

Net income (loss)
$
(283,443
)
$
13,910

$
(258,976
)
$
40,604

Weighted-average common shares outstanding (basic)
17,581

17,703

17,806

17,611

Effect of dilutive securities from equity awards

237


64

Weighted-average common shares outstanding (diluted)
17,581

17,940

17,806

17,675

Basic earnings (loss) per common share
$
(16.12
)
$
0.79

$
(14.54
)
$
2.31

Dilutive earnings (loss) per common share
$
(16.12
)
$
0.78

$
(14.54
)
$
2.30

 
 
 
 
 

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 2,957,843 and 1,229,978 non-dilutive equity awards outstanding for the three (3) months ended December 31, 2011 and 2010, respectively, and 3,055,342 and 1,239,231 non-dilutive equity awards outstanding for the nine (9) months ended December 31, 2011 and 2010, respectively, that are not included in the corresponding period Weighted-average common shares outstanding (diluted) computation.
v2.4.0.6
Comprehensive income (loss) and AOCI
9 Months Ended
Dec. 31, 2011
Comprehensive Income and AOCI [Abstract]  
Comprehensive income (loss) and AOCI
Comprehensive income (loss) and AOCI

The following table details the computation of comprehensive income (loss) for the periods presented:
 
Three (3) months ended
Nine (9) months ended
 
December 31
December 31
 
2011

2010

2011

2010

Net income (loss)
$
(283,443
)
$
13,910

$
(258,976
)
$
40,604

Foreign currency translation adjustment
(2,207
)
(2,087
)
(9,930
)
3,849

Derivative instruments (net of tax)
 
 
 
 
Net change in fair value of cash flow hedging instruments (net of tax)
(230
)
360

(57
)
(92
)
Amounts reclassified into results of operations
(102
)
89

110

407

Pension (net of tax)
 
 


Unrealized gain (loss)
5

4

12

17

Amounts reclassified into results of operations
78

35

200

105

Other comprehensive income (loss)
$
(2,456
)
$
(1,599
)
$
(9,665
)
$
4,286

Comprehensive income (loss)
$
(285,899
)
$
12,311

$
(268,641
)
$
44,890

 
 
 
 
 

The components of AOCI consisted of the following for the periods presented:
 
December 31, 2011

March 31, 2011

Foreign currency translation adjustment
$
13,984

$
23,914

Unrealized gains (losses) on derivatives designated and qualified as cash flow hedges
(111
)
(164
)
Unrecognized gain (losses) on defined benefit pension
(4,015
)
(4,227
)
Accumulated other comprehensive income
$
9,858

$
19,523


v2.4.0.6
Segment Reporting
9 Months Ended
Dec. 31, 2011
Segment Reporting [Abstract]  
Segment Reporting
Segment Reporting

Management reviews financial information for the consolidated Company accompanied by disaggregated information on revenues, operating income (loss) 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
Nine (9) months ended
 
December 31
December 31
 
2011

2010

2011

2010

North America
 
 
 
 
Revenues
$
239,056

$
239,455

$
723,850

$
710,479

Operating income (loss) 1
(259,494
)
18,749

(227,192
)
58,600

Depreciation
1,171

1,350

3,712

4,240

Intangibles amortization
3,238

2,890

9,450

9,028

Assets (as of December 31)
836,001

1,070,513

836,001

1,070,513

Europe
 
 
 
 
Revenues
$
27,179

$
27,446

$
80,016

$
75,186

Operating income (loss) 2
(37,298
)
2,851

(32,181
)
6,340

Depreciation
93

90

282

261

Intangibles amortization
9

9

29

28

Assets (as of December 31)
77,750

134,236

77,750

134,236

All Other
 
 
 
 
Revenues
$
9,704

$
9,778

$
27,670

$
27,534

Operating income
1,415

1,855

3,308

4,935

Depreciation
34

35

103

110

Intangibles amortization
2

2

5

5

Assets (as of December 31)
27,888

27,905

27,888

27,905

1 Includes goodwill impairment loss of $277,132 recorded during the third quarter of Fiscal 2012.
2 Includes goodwill impairment loss of $40,665 recorded during the third quarter of Fiscal 2012.

The sum of the segment revenues, operating income (loss), depreciation and intangibles amortization equals the consolidated revenues, operating income (loss), depreciation and intangibles amortization. The following table reconciles segment assets to total consolidated assets as of December 31, 2011 and 2010:
 
December 31
 
2011

2010

Segment assets for North America, Europe and All Other
$
941,639

$
1,232,654

Corporate eliminations
(52,463
)
(57,940
)
Total consolidated assets
$
889,176

$
1,174,714


The following table presents financial information about the Company by service type for the periods presented:
 
Three (3) months ended
Nine (9) months ended
 
December 31
December 31
 
2011

2010

2011

2010

Data Infrastructure
 
 
 
 
Revenues
$
58,326

$
62,890

$
186,998

$
170,836

Gross profit
14,550

15,427

46,110

43,853

Voice Communications
 
 
 
 
Revenues
$
166,234

$
164,244

$
495,111

$
500,354

Gross profit
51,472

52,667

151,238

161,347

Technology Products
 
 
 
 
Revenues
$
51,379

$
49,545

$
149,427

$
142,009

Gross profit
22,291

22,558

66,412

65,186


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

v2.4.0.6
Commitments and Contingencies
9 Months Ended
Dec. 31, 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.
v2.4.0.6
Stockholders' Equity
9 Months Ended
Dec. 31, 2011
Stockholders' Equity Note [Abstract]  
Stockholders' Equity
Stockholder's Equity

Dividends
The following table presents information about the Company's dividend program for the periods presented:
Period
Record Date
Payment Date
Rate

Aggregate Value

3Q12
December 30, 2011
January 12, 2012
$
0.07

$
1,224

2Q12
September 30, 2011
October 13, 2011
$
0.07

$
1,238

1Q12
July 1, 2011
July 14, 2011
$
0.07

$
1,263

3Q11
December 31, 2010
January 14, 2011
$
0.06

$
1,066

2Q11
October 1, 2010
October 15, 2010
$
0.06

$
1,057

1Q11
July 2, 2010
July 19, 2010
$
0.06

$
1,056


While the Company expects to continue to declare quarterly dividends, the payment of future dividends is at the discretion of the Company's Board of Directors and the timing and amount of any future dividends will depend upon earnings, cash requirements and financial condition of the Company. Under the Credit Agreement, the Company is permitted to make any distribution or dividend as long as no Event of Default or Potential Default (each as defined in the Credit Agreement) occurs or is continuing.

Common Stock Repurchases
The following table presents information about the Company's common stock repurchases for the periods presented:
 
Three (3) months ended
Nine (9) months ended
 
December 31
December 31
 
2011

2010

2011

2010

Common stock purchased
200,000

28

606,978

16,516

Aggregate purchase price
$
5,479

$
1

$
15,292

$
483

Average purchase price
$
27.40

$
36.07

$
25.19

$
29.27


During the first quarter of Fiscal 2012, the Company made tax payments of $1,521 and withheld 45,778 shares of common stock, which were designated as treasury shares, at an average price per share of $33.22, related to share withholding to satisfy employee income taxes due as a result of the vesting in May 2011 of certain restricted stock units and performance shares. During the first quarter of Fiscal 2011, the Company made tax payments of $482 and withheld 16,488 shares of common stock, which were designated as treasury shares, at an average price per share of $29.26, related to share withholding to satisfy employee income taxes due as a result of the vesting in May 2010 of certain restricted stock units.

Since the inception of the repurchase program in April 1999 through December 31, 2011, the Company has repurchased 8,187,479 shares of common stock for an aggregate purchase price of $336,869, or an average purchase price per share of $41.14. These shares do not include the treasury shares withheld for tax payments resulting from the vesting in May 2011 and May 2010 of certain restricted stock units and performance shares. As of December 31, 2011, 312,521 shares were available under repurchase programs approved by the Board. Additional repurchases of common stock may occur from time to time depending upon factors such as the Company’s cash flows and general market conditions. There can be no assurance as to the timing or amount of such repurchases. Under the Credit Agreement, the Company is permitted to repurchase its common stock as long as no Event of Default or Potential Default (each as defined in the Credit Agreement) occurs or is continuing, the leverage ratio (after taking into consideration the payment made to repurchase such common stock) would not exceed 2.75 to 1.0 and the availability to borrow under the Credit Facility would not be less than $20,000.