Close

Form 8-K BLACK BOX CORP For: Nov 01

FREE Breaking News Alerts from StreetInsider.com!

E-mail Address

StreetInsider.com Top Tickers, 4/23/2024

1. TSLA
2. SPY
3. GM
4. SPOT
5. AMZN
6. SHW
7. AAPL
8. IBM
9. MINN
10. NVDA


November 1, 2016 4:09 PM EDT
                                                        

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): November 1, 2016


Black Box Corporation
(Exact Name of Registrant as Specified in its Charter)


Delaware
0-18706
95-3086563
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer
Identification No.)

1000 Park Drive
Lawrence, Pennsylvania
 
15055
(Address of Principal Executive Offices)
 
(Zip Code)

Registrant's telephone number, including area code: (724) 746-5500

N/A
(Former Name or Former Address, if Changed Since Last Report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


1
                                                        

Item 2.02
Results of Operations and Financial Condition.
On November 1, 2016, Black Box Corporation (the “Company”) issued a press release announcing financial results for the fiscal quarter ended October 1, 2016. A copy of the press release is furnished as Exhibit 99.1 to this report.
Cautionary Forward-Looking Statements
When included in this Form 8-K, the words "expects," "believes" and "anticipates" and analogous expressions are intended to identify forward-looking statements. One can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Such 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, such risks and uncertainties may include, among others, 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, successful marketing of the Company's product and services offerings, successful implementation of the Company's integration initiatives, successful implementation of the Company's government contracting programs, competition, changes in foreign, political and economic conditions, fluctuating foreign currencies compared to the U.S. dollar, rapid changes in technologies, client preferences, the Company's arrangements with suppliers of voice equipment and technology, 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, 2016. These forward looking statements 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 Form 8-K. The Company expressly disclaims any obligation or undertaking to release publicly any updates or any changes in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No.     Description
99.1        Press Release dated November 1, 2016
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
BLACK BOX CORPORATION
Date: November 1, 2016
/s/ TIMOTHY C. HUFFMYER                                 
Timothy C. Huffmyer
Vice President, Chief Financial Officer
and Treasurer (Principal Accounting Officer)

Exhibit Index
Exhibit No.     Description
99.1        Press Release dated November 1, 2016


2
                                    Exhibit 99.1

bboxnetservlogo2q25.jpg
 
                    
Contact
Black Box Corporation
Timothy C. Huffmyer
Vice President, Chief Financial Officer and Treasurer
Phone: (724) 873-6788

FOR IMMEDIATE RELEASE
BLACK BOX CORPORATION REPORTS SECOND QUARTER OF FISCAL 2017 RESULTS

PITTSBURGH, PENNSYLVANIA, November 1, 2016 - Black Box Corporation (NASDAQ: BBOX), a leading technology solutions provider dedicated to helping customers design, build, manage and secure their IT infrastructure, today reported results for the second quarter of Fiscal 2017 and six-month period ended October 1, 2016.

2Q17 Results
•
Revenues were $218.7 million, down 8% from $236.8 million for the same period last year and consistent with $218.5 million in the sequential period.
•
Benefit for income taxes was $1.5 million, compared to $21.5 million for the same period last year and compared to a provision for income taxes of $2.3 million in the sequential period.
•
Net loss was $6.1 million, which included $14.9 million ($9.2 million net of tax) of non-recurring expense, compared to $129.8 million, which included $160.7 million ($135.5 million net of tax) of non-recurring expense, for the same period last year and compared to $0.5 million in the sequential period.
•
Diluted loss per share was $0.40, compared to $8.45 for the same period last year and compared to $0.03 in the sequential period.
•
Operating net income* was $4.7 million, down 18% from $5.7 million for the same period last year and up 133% from $2.0 million in the sequential period.
•
Operating EPS* was $0.31, down 17% from $0.37 for the same period last year and up 132% from $0.13 in the sequential period.
•
Cash flow provided by operations was $4.8 million, compared to cash flow used for operations of $6.5 million for the same period last year and cash flow provided by operations of $10.9 million in the sequential period.
•
We provided $1.8 million of dividends to our shareholders, compared to $1.7 million for the same period last year and $1.7 million in the sequential period.
2QYTD17 Results
•
Revenues were $437.2 million, down 6% from $466.1 million for the same period last year.

1
                                    Exhibit 99.1

•
Provision for income taxes was $0.8 million, compared to a benefit from income taxes of $19.4 million for the same period last year.
•
Net loss was $6.6 million, which included $16.2 million ($10.0 million net of tax) of non-recurring expense, compared to $129.1 million, which included $163.5 million ($137.2 million net of tax) of non-recurring expense, for the same period last year.
•
Diluted loss per share was $0.44, compared to $8.41 for the same period last year.
•
Operating net income* was $6.8 million, down 27% from $9.2 million for the same period last year.
•
Operating EPS* was $0.45, down 25% from $0.60 for the same period last year.
•
Cash flow provided by operations was $15.7 million, compared to cash flow used for operations of $13.9 million for the same period last year.
•
We provided $3.5 million of dividends to our shareholders compared to $3.2 million for the same period last year.
* See the information under the caption "Non-GAAP Financial Measures" below for a discussion regarding the usefulness of the non-GAAP financial measures contained in this release, definitions of those non-GAAP financial measures and reconciliations to their most directly comparable GAAP financial measures.
"The execution of our business transformation roadmap is on track with the plan we presented in May to first stabilize and then optimize the business,” said E.C. Sykes, President and CEO.  “The team over-achieved on cost-control and working capital initiatives, allowing us to meet or exceed these goals and to increase profitability relative to the prior quarter in spite of revenues slightly below our targets.  We remain on track to implement our new operating model by the end of Fiscal 2017."

Earnings Conference Call
The Company will conduct a conference call beginning at 5:00 p.m. Eastern Time today, November 1, 2016. E.C. Sykes, President and Chief Executive Officer, will host the call. To listen only to the live webcast, access the event at http://investor.blackbox.com/events.cfm. To participate in the teleconference, dial 877-303-3145 (USA) or 253-237-1194 (International) approximately 15 minutes prior to the starting time and ask to be connected to conference 94628629. 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 technology 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 3,434 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.

2
                                    Exhibit 99.1

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 levels of business activity and operating expenses, expenses relating to compliance requirements, cash flows, global economic and business conditions, successful integration of acquisitions, the timing, benefits and costs of restructuring programs and other initiatives, successful marketing of the Company's product and services offerings, successful implementation of the Company's integration initiatives, successful implementation of the Company's government contracting programs, competition, changes in foreign, political and economic conditions, fluctuating foreign currencies compared to the U.S. dollar, rapid changes in technologies, client preferences, the Company's arrangements with suppliers of voice equipment and technology, 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, 2016. 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.

3
                                    Exhibit 99.1

BLACK BOX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
In millions and may not foot due to rounding
October 1, 2016

March 31, 2016

Assets
 
 
Cash and cash equivalents
$
16.1

$
23.5

Accounts receivable, net
146.1

139.2

Inventories, net
26.0

42.7

Costs/estimated earnings in excess of billings on uncompleted contracts
71.6

66.7

Other assets
26.0

27.3

Total current assets
285.8

299.4

Property, plant and equipment, net
33.6

34.5

Intangibles, net
73.4

78.2

Deferred tax asset
54.5

57.1

Other assets
7.2

6.7

Total assets
$
454.5

$
475.8

Liabilities
 
 
Accounts payable
$
61.8

$
56.8

Accrued compensation and benefits
23.1

21.5

Deferred revenue
30.2

29.4

Billings in excess of costs/estimated earnings on uncompleted contracts
22.3

20.4

Other liabilities
43.2

42.2

Total current liabilities
180.5

170.4

Long-term debt
101.7

119.7

Other liabilities
25.3

29.5

Total liabilities
$
307.6

$
319.6

Stockholders’ equity
 
 
Common stock
$
—

$
—

Additional paid-in capital
505.0

501.8

Retained earnings
70.3

80.6

Accumulated other comprehensive income (loss)
(14.9
)
(13.1
)
Treasury stock, at cost
(413.6
)
(413.1
)
Total stockholders’ equity
$
146.9

$
156.2

Total liabilities and stockholders’ equity
$
454.5

$
475.8

 
 
 


4
                                    Exhibit 99.1

BLACK BOX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
In millions, except per share amounts and may not foot due to rounding
2Q17

1Q17

2Q16

2QYTD17

2QYTD16

Revenues
 
 
 
 
 
Products
$
42.3

$
39.9

$
44.3

$
82.1

$
84.8

Services
176.5

178.6

192.6

355.1

381.3

Total
218.7

218.5

236.8

437.2

466.1

Cost of sales
 
 
 
 
 
Products
27.2

22.9

25.5

50.1

49.2

Services
137.1

127.9

139.9

265.0

275.8

Total
164.3

150.8

165.4

315.1

325.0

Gross profit
54.4

67.7

71.4

122.1

141.1

Selling, general & administrative expenses
58.1

62.5

61.4

120.6

124.3

Long-lived asset impairment loss
0.5

—

157.3

0.5

157.3

Intangibles amortization
2.3

2.5

2.6

4.8

5.2

Operating income (loss)
(6.5
)
2.7

(149.9
)
(3.8
)
(145.7
)
Interest expense, net
1.1

1.2

1.1

2.3

2.4

Other expenses (income), net
—

(0.3
)
0.4

(0.3
)
0.4

Income (loss) before provision for income taxes
(7.6
)
1.9

(151.4
)
(5.8
)
(148.5
)
Provision (benefit) for income taxes
(1.5
)
2.3

(21.5
)
0.8

(19.4
)
Net income (loss)
$
(6.1
)
$
(0.5
)
$
(129.8
)
$
(6.6
)
$
(129.1
)
Earnings (loss) per common share
 
 
 
 
 
Basic
$
(0.40
)
$
(0.03
)
$
(8.45
)
$
(0.44
)
$
(8.41
)
Diluted
$
(0.40
)
$
(0.03
)
$
(8.45
)
$
(0.44
)
$
(8.41
)
Weighted-average common shares outstanding
 
 
 
 
 
Basic
15.1

15.1

15.4

15.1

15.3

Diluted
15.1

15.1

15.4

15.1

15.3

Dividends per share
$
0.12

$
0.12

$
0.11

$
0.24

$
0.22



5
                                    Exhibit 99.1

BLACK BOX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In millions and may not foot due to rounding
2Q17

1Q17

2Q16

2QYTD17

2QYTD16

Operating Activities
 
 
 
 
 
Net income (loss)
$
(6.1
)
$
(0.5
)
$
(129.8
)
$
(6.6
)
$
(129.1
)
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities
 
 
 
 
 
Intangibles amortization
2.3

2.5

2.6

4.8

5.2

Depreciation
2.4

2.2

2.1

4.6

4.1

Loss (gain) on sale of property
—

(1.2
)
—

(1.2
)
—

Deferred taxes
(0.8
)
2.9

(25.9
)
2.1

(23.2
)
Stock compensation expense
0.9

2.2

0.9

3.2

3.1

Change in fair value of interest-rate swaps
—

—

(0.1
)
—

(0.4
)
Long-lived asset impairment loss
0.5

—

157.3

0.5

157.3

Provision for obsolete inventory
9.4

0.3

0.2

9.7

0.5

Provision for (recovery of) doubtful accounts
0.1

0.2

(0.2
)
0.3

0.1

Changes in operating assets and liabilities (net of acquisitions)
 
 
 
 
 
Accounts receivable
(12.2
)
4.6

(12.3
)
(7.6
)
(14.4
)
Inventories
4.5

2.3

2.9

6.8

3.8

Costs/estimated earnings in excess of billings on uncompleted contracts
(1.6
)
(3.6
)
2.4

(5.1
)
0.3

All other assets
0.9

(1.2
)
4.4

(0.3
)
11.4

Accounts payable
4.4

0.5

(6.8
)
4.9

(6.2
)
Billings in excess of costs/estimated earnings on uncompleted contracts
1.1

0.9

2.6

2.0

2.2

All other liabilities
(1.1
)
(1.2
)
(6.6
)
(2.3
)
(28.7
)
Net cash provided by (used for) operating activities
$
4.8

$
10.9

$
(6.5
)
$
15.7

$
(13.9
)
Investing Activities
 
 
 
 
 
Capital expenditures
$
(1.8
)
$
(2.1
)
$
(2.6
)
$
(3.9
)
$
(4.5
)
Capital disposals
—

1.4

0.1

1.4

0.1

Acquisition of businesses (payments)/recoveries
—

—

—

—

—

Net cash provided by (used for) investing activities
$
(1.8
)
$
(0.7
)
$
(2.5
)
$
(2.5
)
$
(4.4
)
Financing Activities
 
 
 
 
 
Proceeds (repayments) from long-term debt
$
(13.1
)
$
(4.8
)
$
7.0

$
(17.9
)
$
13.9

Proceeds (repayments) from short-term debt
5.8

(4.2
)
4.1

1.6

6.4

Deferred financing costs
—

(1.0
)
—

(1.0
)
—

Purchase of treasury stock
—

(0.5
)
—

(0.5
)
(2.8
)
Payment of dividends
(1.8
)
(1.7
)
(1.7
)
(3.5
)
(3.2
)
Increase (decrease) in cash overdrafts
0.3

0.1

(1.2
)
0.4

—

Net cash provided by (used for) financing activities
$
(8.8
)
$
(12.1
)
$
8.2

$
(20.9
)
$
14.3

Foreign currency exchange impact on cash
$
0.6

$
(0.2
)
$
0.6

$
0.3

$
0.7

Increase/(decrease) in cash and cash equivalents
$
(5.2
)
$
(2.1
)
$
(0.2
)
$
(7.4
)
$
(3.2
)
Cash and cash equivalents at beginning of period
21.4

23.5

20.5

23.5

23.5

Cash and cash equivalents at end of period
$
16.1

$
21.4

$
20.3

$
16.1

$
20.3

 
 
 
 
 
 

6
                                    Exhibit 99.1

Non-GAAP Financial Measures
As a supplement to United States Generally Accepted Accounting Principles ("GAAP"), the Company provides non-GAAP financial measures such as operating income before provision for income taxes ("EBIT"), operating net income, operating earnings per share ("EPS"), revenues excluding foreign currency, adjusted operating income, Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), Operating EBITDA and free cash flow to illustrate the Company's operational performance. These non-GAAP financial measures are not prepared in accordance with GAAP, are not reported by all of the Company's competitors and may not be directly comparable to similarly-titled measures of the Company's competitors due to potential differences in the exact method of calculation. However, each of the amounts included in the calculation of non-GAAP financial measures are computed in accordance with GAAP. See below for reconciliations to the most directly comparable GAAP financial measures.
Management uses these non-GAAP financial measures (a) to evaluate the Company's historical and prospective financial performance as well as its performance relative to its competitors, (b) to set internal sales targets and associated operating budgets, (c) to allocate resources and (d) to measure operational profitability. Management uses similar non-GAAP measures as an important factor in determining variable compensation for Management and its team members.
Non-GAAP financial measures are not in accordance with, or an alternative for, GAAP financial measures. The Company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.
Operating EBIT, operating net income and operating EPS
Management believes that operating EBIT, defined by the Company as net income (loss) plus provision (benefit) for income taxes and adjustments, operating net income, defined by the Company as operating EBIT less operational income taxes, and operating EPS, defined as operating net income divided by weighted average common shares outstanding (diluted), provide investors additional important information to enable them to assess, in the way Management assesses, the Company's current and future operations. Adjustments include intangibles amortization, the change in fair value of the interest-rate swaps, accounts receivable impairment loss, inventory impairment loss, and long-lived asset impairment loss, each of which are non-cash charges, and restructuring expense, CEO transition costs, and gains/losses on sales of facilities, each of which are cash charges.
A reconciliation of Net income (loss) to operating EBIT and Operating net income is presented below:
In millions and may not foot due to rounding
2Q17

1Q17

2Q16

2QYTD17

2QYTD16

Net income (loss)
$
(6.1
)
$
(0.5
)
$
(129.8
)
$
(6.6
)
$
(129.1
)
Provision (benefit) for income taxes
(1.5
)
2.3

(21.5
)
0.8

(19.4
)
Effective tax rate
20.0
%
125.6
%
14.2
%
(14.0
)%
13.1
%
Income (loss) before provision for income taxes
$
(7.6
)
$
1.9

$
(151.4
)
$
(5.8
)
$
(148.5
)
 
 
 
 
 
 
Adjustments
 
 
 
 
 
Intangibles amortization
$
2.3

$
2.5

$
2.6

$
4.8

$
5.2

Interest rate swap
—

—

(0.1
)
—

(0.4
)
Restructuring expense
2.9

—

0.9

2.9

1.4

Inventory impairment loss
9.1

—

—

9.1

—

Loss (gain) on sale of facilities
—

(1.2
)
—

(1.2
)
—

Long-lived asset impairment loss
0.5

—

157.3

0.5

157.3

Total pre-tax adjustments
$
14.9

$
1.3

$
160.7

$
16.2

$
163.5

 
 
 
 
 
 
Operating EBIT
$
7.3

$
3.1

$
9.3

$
10.4

$
15.0

Operational effective tax rate
35.0
%
35.0
%
38.5
%
35.0
 %
38.5
%
Operational income taxes (1)
2.6

1.1

3.6

3.6

5.8

Operating net income
$
4.7

$
2.0

$
5.7

$
6.7

$
9.2

(1) The effective tax rate used to determine operational income taxes is based on the Company's projected full-year ordinary income tax expense and the projected full-year impact of certain discreet tax items.


7
                                    Exhibit 99.1

A reconciliation of Diluted earnings (loss) per share to operating EPS is presented below:
 
2Q17

1Q17

2Q16

2QYTD17

2QYTD16

Diluted EPS
$
(0.40
)
$
(0.03
)
$
(8.45
)
$
(0.44
)
$
(8.41
)
EPS impact *
0.71

0.17

8.82

0.88

9.01

Operating EPS
$
0.31

$
0.13

$
0.37

$
0.45

$
0.60

* EPS impact is the result of excluding the provision for income taxes and the adjustments and utilizing an operational effective tax rate.
Revenues excluding foreign currency
Management is presented with and reviews revenues which exclude foreign currency and enable an investor to assess, in the way Management assesses, revenues from its core operations.
Information on quarterly revenues excluding foreign currency compared to the same period last year is presented below:
In millions and may not foot due to rounding
2Q17

2Q16

% Change

Revenues
$
218.7

$
236.8

(8
)%
Foreign currency impact - North America Products
—

—

 
Foreign currency impact - North America Services
—

—

 
Foreign currency impact - International Products
(0.1
)
—

 
Foreign currency impact - International Services
0.6

—

 
Revenues (excluding foreign currency)
$
219.2

$
236.8

(7
)%
Information on quarterly revenues excluding foreign currency compared to the sequential quarter is presented below:
In millions and may not foot due to rounding
2Q17

1Q17

% Change

Revenues
$
218.7

$
218.5

—
%
Foreign currency impact - North America Products
—

—

 
Foreign currency impact - North America Services
—

—

 
Foreign currency impact - International Products
0.2

—

 
Foreign currency impact - International Services
0.4

—

 
Revenues (excluding foreign currency)
$
219.3

$
218.5

—
%
Information on year-to-date revenues excluding foreign currency compared to the same period last year is presented below:
In millions and may not foot due to rounding
2QYTD17

2QYTD16

% Change

Revenues
$
437.2

$
466.1

(6
)%
Foreign currency impact - North America Products
—

—

 
Foreign currency impact - North America Services
0.1

—

 
Foreign currency impact - International Products
(0.2
)
—

 
Foreign currency impact - International Services
0.7

—

 
Revenues (excluding foreign currency)
$
438.0

$
466.1

(6
)%


8
                                    Exhibit 99.1

Segment Information
Management is presented with and reviews Revenues, Gross profit, Operating income (loss) and Adjusted operating income by segment. Management believes that Adjusted operating income, defined by the Company as Operating income (loss) plus adjustments, provides investors additional important information to enable them to assess, in the way Management assesses, the Company's current and future operations. Adjustments include intangibles amortization, accounts receivable impairment loss, inventory impairment loss, long-lived asset impairment loss, each of which are non-cash charges, and restructuring expense, CEO transition costs, and gains/losses on sales of facilities, each of which are cash charges.
A reconciliation of Operating income (loss) to Adjusted operating income (by segment) is presented below:
 
2Q17
1Q17
2Q16
2QYTD17
2QYTD16
In millions and may not foot due to rounding
$
% of Rev
$
% of Rev
$
% of Rev
$
% of Rev
$
% of Rev
Revenues
 
 
 
 
 
 
 
 
 
 
North America Products
$21.0
 
$19.1
 
$24.3
 
$40.0
 
$45.2
 
International Products
21.3
 
20.8
 
19.9
 
42.1
 
39.6
 
Products
$42.3

$39.9

$44.3

$82.1

$84.8
 
North America Services
$169.8
 
$171.7
 
$185.5
 
$341.5
 
$367.5
 
International Services
6.7
 
6.9
 
7.1
 
13.6
 
13.8
 
Services
$176.5

$178.6

$192.6

$355.1

$381.3
 
Total
$218.7

$218.5

$236.8

$437.2

$466.1
 
Gross profit
 
 
 
 
 
 
 
 
 
 
North America Products
$6.5
31.2%
$8.9
46.8%
$10.9
44.8%
$15.5
38.6%
$19.8
43.8%
International Products
8.5
40.0%
8.0
38.5%
7.9
39.6%
16.5
39.3%
15.8
40.0%
Products
$15.1
35.6%
$16.9
42.5%
$18.8
42.4%
$32.0
39.0%
$35.6
42.0%
North America Services
$38.0
22.4%
$49.1
28.6%
$51.0
27.5%
$87.1
25.5%
$102.1
27.8%
International Services
1.4
21.5%
1.6
22.8%
1.6
22.5%
3.0
22.1%
3.3
24.0%
Services
$39.4
22.3%
$50.7
28.4%
$52.6
27.3%
$90.1
25.4%
$105.4
27.7%
Total
$54.4
24.9%
$67.7
31.0%
$71.4
30.1%
$122.1
27.9%
$141.1
30.3%
Operating income (loss)
 
 
 
 
 
 
 
 
 
 
North America Products
$(1.2)
(5.5)%
$0.9
4.7%
$(22.9)
(94.1)%
$(0.3)
(0.6)%
$(21.9)
(48.5)%
International Products
0.5
2.2%
0.4
1.8%
(5.1)
(25.6)%
0.8
2.0%
(4.8)
(12.1)%
Products
$(0.7)
(1.6)%
$1.3
3.2%
$(28.0)
(63.2)%
$0.6
0.7%
$(26.7)
(31.5)%
North America Services
$(6.1)
(3.6)%
$1.1
0.7%
$(114.9)
(62.0)%
$(5.0)
(1.5)%
$(112.6)
(30.6)%
International Services
0.3
3.8%
0.3
4.4%
(6.9)
(97.4)%
0.6
4.1%
(6.4)
(46.5)%
Services
$(5.9)
(3.3)%
$1.4
0.8%
$(121.9)
(63.3)%
$(4.4)
(1.2)%
$(119.0)
(31.2)%
Total
$(6.5)
(3.0)%
$2.7
1.2%
$(149.9)
(63.3)%
$(3.8)
(0.9)%
$(145.7)
(31.3)%
Adjustments
 
 
 
 
 
 
 
 
 
 
North America Products
$2.9
 
$—
 
$25.2
 
$2.9
 
$25.2
 
International Products
0.8
 
0.1
 
5.8
 
0.9
 
5.9
 
Products
$3.7
 
$0.1
 
$31.0
 
$3.8
 
$31.1
 
North America Services
$11.2
 
$1.2
 
$122.6
 
$12.3
 
$125.6
 
International Services
—
 
—
 
7.2
 
—
 
7.3
 
Services
$11.2
 
$1.2
 
$129.8
 
$12.4
 
$132.8
 
Total
$14.9
 
$1.3
 
$160.8
 
$16.2
 
$163.9
 
Adjusted operating income
 
 
 
 
 
 
 
 
 
North America Products
$1.8
8.5%
$0.9
4.7%
$2.3
9.5%
$2.7
6.7%
$3.3
7.3%
International Products
1.3
5.9%
0.5
2.4%
0.7
3.4%
1.8
4.2%
1.1
2.7%
Products
$3.0
7.2%
$1.4
3.5%
$3.0
6.8%
$4.4
5.4%
$4.4
5.2%
North America Services
$5.1
3.0%
$2.3
1.3%
$7.6
4.1%
$7.4
2.2%
$13.0
3.5%
International Services
0.3
4.1%
0.3
4.4%
0.3
4.6%
0.6
4.2%
0.9
6.2%
Services
$5.3
3.0%
$2.6
1.5%
$7.9
4.1%
$7.9
2.2%
$13.8
3.6%
Total
$8.4
3.8%
$4.0
1.8%
$10.9
4.6%
$12.4
2.8%
$18.2
3.9%

9
                                    Exhibit 99.1

EBITDA and Operating EBITDA
Management believes that EBITDA, defined as Net income (loss) plus provision (benefit) for income taxes, interest, depreciation and amortization, is a widely-accepted measure of profitability that may be used to measure the Company's ability to service its debt. Operating EBITDA, defined as EBITDA plus stock compensation expense, accounts receivable impairment loss, inventory impairment loss, and long-lived asset impairment loss may also be used to measure the Company's ability to service its debt.
A reconciliation of Net income (loss) to EBITDA and Operating EBITDA is presented below:
In millions and may not foot due to rounding
2Q17

1Q17

2Q16

2QYTD17

2QYTD16

Net income (loss)
$
(6.1
)
$
(0.5
)
$
(129.8
)
$
(6.6
)
$
(129.1
)
Provision (benefit) for income taxes
(1.5
)
2.3

(21.5
)
0.8

(19.4
)
Interest expense, net
1.1

1.2

1.1

2.3

2.4

Intangibles amortization
2.3

2.5

2.6

4.8

5.2

Depreciation
2.4

2.2

2.1

4.6

4.1

EBITDA
$
(1.9
)
$
7.8

$
(145.6
)
$
5.8

$
(136.8
)
Stock compensation expense
0.9

2.2

0.9

3.2

3.1

Inventory impairment loss
9.1

—

—

9.1

—

Long-lived asset impairment loss
0.5

—

157.3

0.5

157.3

Operating EBITDA
$
8.7

$
10.0

$
12.5

$
18.7

$
23.6

Free cash flow
Management believes that free cash flow, defined by the Company as Net cash provided by (used for) operating activities less net capital expenditures, plus or minus Foreign currency exchange impact on cash, plus Proceeds from stock option exercises, is an important measurement of liquidity as it represents the total cash available to the Company.
A reconciliation of Net cash provided by (used for) operating activities to free cash flow is presented below:
In millions and may not foot due to rounding
2Q17

1Q17

2Q16

2QYTD17

2QYTD16

Net cash provided by (used for) operating activities
$
4.8

$
10.9

$
(6.5
)
$
15.7

$
(13.9
)
Net capital expenditures
(1.8
)
(0.7
)
(2.5
)
(2.5
)
(4.4
)
Foreign currency exchange impact on cash
0.6

(0.2
)
0.6

0.3

0.7

Free cash flow before stock option exercises
$
3.6

$
9.9

$
(8.4
)
$
13.5

$
(17.6
)
Proceeds from the exercise of stock options
—

—

—

—

—

Free cash flow
$
3.6

$
9.9

$
(8.4
)
$
13.5

$
(17.6
)
Significant Balance Sheet ratios and Other Information
Information on certain balance sheet ratios, backlog and headcount is presented below:
Dollars In millions
2Q17

1Q17

2Q16

Days sales outstanding
56 days

53 days

59 days

Aggregate days sales outstanding
80 days

77 days

83 days

Inventory turns
22.6x

13.2x

11.8x

Six-month order backlog
$
183.7

$
173.8

$
182.3

Headcount
3,434

3,552

3,677

Net Debt
$
85.6

$
93.5

$
131.0

Leverage ratio*
2.79

3.03

3.15

* Leverage ratio is based on Adjusted EBITDA as defined under our credit facility with PNC Bank.

10

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings