PITTSBURGH, PENNSYLVANIA, July 16, 2018 - Black Box Corporation (NASDAQ:BBOX), a leading digital solutions provider dedicated to helping customers design, build, manage and secure their IT infrastructure, today reported results for the fourth quarter of Fiscal 2018 and twelve-month period ended March 31, 2018.
Fourth Quarter Results
- Revenues declined by $14.2 million or 6.8% to $194.0 million compared to the same period last year, while the revenue decline from the prior quarter was $0.9 million or 0.5%.
- Gross profit margin was 27.3%, down 80 basis points from 28.1% for the same period last year. This decrease was primarily due to a decline in our higher margin legacy unified communication business and lower margin incremental projects in both our Products and Services segments during this quarter. The gross profit margin in the prior quarter was 27.0%.
- Selling, general and administrative expenses were $58.8 million, up 4.3% from $56.4 million for the same period last year and down 0.3% from $59.0 million in the prior quarter. The increase from the comparable prior year period was primarily due to higher spending on the U.S.-based ERP project, partially offset by lower variable compensation costs.
- The Company recorded a $9.7 million non-cash asset impairment charge related to the write down of intangible assets as a result of its annual impairment assessment.
- Loss before income taxes was $19.3 million, compared to a loss before income taxes of $1.2 million for the same period last year and compared to a loss before income taxes of $9.8 million in the prior quarter.
- Provision for income taxes was $31.7 million, compared to $0.6 million for the same period last year and compared to $18.1 million in the prior quarter. The variance from the statutory rate in the current quarter was principally due to a valuation allowance recorded on the Company's deferred tax assets.
- Net loss was $51.0 million, compared to a net loss of $1.8 million for the same period last year and compared to a net loss of $27.9 million in the prior quarter.
- Diluted loss per share was $3.37, compared to a diluted loss per share of $0.12 for the same period last year and compared to a diluted loss per share of $1.85 in the prior quarter.
- Cash flow used for operating activities was $3.5 million, compared to cash flow provided by operating activities of $15.2 million for the same period last year and compared to cash flow used by operating activities of $27.5 million in the prior quarter. The variance compared to the prior quarter was principally due to improved working capital management.
Year to Date Results
- Revenues were $774.6 million, down 9.5% from $855.7 million for the prior year.
- Gross profit margin was 27.7%, down 70 basis points from 28.4% last year. The decrease was primarily due to a decline in our higher margin legacy unified communication business and lower margin project work in our commercial services business within North America Services.
- Selling, general and administrative expenses were $241.4 million, up 3.0% from $234.4 million last year. The increase was primarily due to higher spending on the U.S.-based ERP project, partially offset by lower variable compensation costs.
- Loss before income taxes was $52.3 million, compared to a loss before income taxes of $5.3 million for the same period last year.
- Provision for income taxes was $47.8 million, compared to $1.8 million for the same period last year. The variance from the statutory rate in fiscal 2018 was principally due to the impact of tax reform as well as a valuation allowance recorded on the Company’s deferred tax assets.
- Net loss was $100.1 million, compared to a net loss of $7.1 million for the same period last year.
- Diluted loss per share was $6.64, compared to a diluted loss per share of $0.47 for the same period last year.
- Cash flow used for operating activities was $46.6 million, compared to cash flow provided by operating activities of $39.9 million for the same period last year.
“I have spent the last few weeks visiting with customers and hearing about the critical and valued services we are providing,” stated Joel Trammell, President and CEO. “I have assured them as well as our vendors and employees that we have many work streams in process that are intended to restore the profitability and financial health of Black Box. Our Credit Agreement Amendment was only step one. The sale of our Federal Business will be step two. As mentioned in our Form 10-K, the next steps include plans to potentially restructure, refinance and/or sell additional assets. Of course, during this time, we are also working to improve the operating profitability and cash flow of our Company.”
“I am pleased with our operating results given the issues we have been dealing with as noted in our recent filings,” continued Mr. Trammell. “This quarter marks the fourth consecutive quarter where revenue has been relatively flat. Our operations teams have done a great job of remaining focused on serving our clients well, despite the distractions. I would like to acknowledge our lenders for providing us the additional support to smoothly operate our business. Additionally, I thank our customers, vendors, suppliers and team members who continue to support our efforts. They are the reason I am proud to be leading Black Box.”
Mr. Trammell concluded by saying, “While we continue to face many challenges, our expectations for the first quarter of Fiscal 2019 is for flat to slightly lower revenues and improved gross profit margin.”
Earnings Conference Call
A replay of the audio webcast will be available at http://investor.blackbox.com/events.cfm for a limited period of time.
About Black Box
Black Box is a leading digital solutions provider dedicated to helping customers design, build, manage and secure their IT infrastructure. Black Box delivers high-value products and services through its global presence and 3,264 team members. To learn more, visit the Black Box Web site at http://www.blackbox.com.
Black Box® and the Double Diamond logo are registered trademarks of BB Technologies, Inc.
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For Investor Relations Inquiries:
Black Box Corporation
David J. Russo
Senior Vice President and Chief Financial Officer
Phone: (724) 873-6788
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 and speak only as of the date of this release. You can identify these forward-looking statements by the fact that 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, among others, liquidity, compliance with bank covenants, our going concern qualification, the Company's arrangements with its vendors and subcontractors, levels of business activity and operating expenses, expenses relating to compliance requirements, cash flows, global economic and business conditions, the timing and costs of restructuring programs and other initiatives, such as our enterprise resource planning system initiatives, successful marketing of the Company's product and services offerings, successful implementation of the Company's integration initiatives and successful implementation of the Company's government contracting programs, as well as competition, changes in foreign, political and economic conditions, fluctuating foreign currencies compared to the U.S. dollar, rapid changes in technologies, client preferences, government budgetary constraints and various other matters, many of which are beyond the Company's control. Additional risk factors are included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2018, filed contemporaneously with this Form 8-K. We can give no assurance that any goal, plan or target set forth in forward-looking statements will 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 and caution you not to unduly rely on any such forward-looking statements.