Black Box Corporation Investor Presentation

Transcription

1 Black Box Corporation Investor Presentation

2 Black Box Corporation Forward-Looking Statements - Any forward-looking statements contained in this presentation 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 presentation. 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. Forward-looking statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. Risk factors are included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2016 and our other filings with the Securities and Exchange Commission (the SEC ). We can give no assurance that any goal, plan or target set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. We undertake no obligation to release publicly any revisions to forward-looking statements as a result of future events or developments. GAAP Reconciliation -This presentation also includes, as a supplement to United States Generally Accepted Accounting Principles ( GAAP ), certain non-gaap financial measures. These non-gaap financial measures exclude the impact of certain items and, therefore, have not been calculated in accordance with GAAP. Pursuant to the requirements of the SEC s Regulation G, we provide in our SEC filings additional information regarding these non-gaap financial measures, including a reconciliation of them to their most comparable GAAP financial measures, management s explanations regarding the use and usefulness of non-gaap financial measures and the limitations associated with the use of non-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 measurements, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP. 2

3 Trusted A proven, stable and adaptable company providing IT solutions for 40 years Experienced 2,300 technical staff with 4,300 certifications, trained to solve your IT problems Everywhere 3 Where you need us: 89 offices serving 33 countries

4 Delivery Platforms Products Platform Services Platform IT Infrastructure Specialty Networking High Performance KVM AV, Multimedia Collaboration and Communications Infrastructure and Enterprise Mobility Managed Services and Outsourcing Network and RF Design/Consulting National Tech & IoT Deployment Team 4

5 5 Trusted IT Partner

6 Transformation Roadmap Stabilize Predictable (Mgmt. System) 1BBOX Reset Business Model Optimize Above Market Growth Integrated Systems Implement Business Model Expand Adjacent Markets Tuck-in Acquisitions Transform New Growth Curve 6

7 Transformation occurring on two fronts Organization Transformation» Branch to Centralized Sales Operations Support Business Model Transformation» UCC premise market declining» From Capex to Opex (XaaS, consumption)» From Project selling to outcome based selling 7

8 Priorities Execute Cash Simplify Grow Focus on operation transformation Create market focused sales organization Improve Working Capital efficiency to generate cash Size cost structure to the revenue stream Reduce investments in declining markets Position for FY18 Growth Unite divisions to leverage size and scale Reduce the number of ERP systems and entities 8

9 Financial Overview Dollars in millions

10 Revenues Revenues by Industry Revenues by Client Type Revenues by Client Size (2) Business Services 7% 8% Retail 9% Manufacturing 12% Technology 13% Healthcare 3% Construction 18% Government 17% Other 13% Financial 20% Indirect 80% End-User 20% Small 20% Medium 60% Large (1) Other includes Distribution, Education, Hospitality, Transportation and Utilities. (2) Large companies include those with revenues greater than $1 billion, including federal governments. Medium companies include those with revenues between $100 million and $1 billion, including state governments. Small companies include those with revenues less than $100 million, including local governments. 10 Source: Derived from Company s FY16 Annual Report.

11 Revenues Revenues $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $- $971 $993 $913 $789 $816 $746 $182 $177 $167 Products Services 11 Source: Derived from Company data and Company s FY16 Form 10-K.

12 Adjusted EPS Adj. Operating Income % of Revenues Adjusted Operating Income and Adjusted EPS $60 $50 $50 Adjusted Operating Income 10% 8% $40 $30 $20 $10 $- $39 6% $24 5% 4% $11 $7 $10 Products Services % of Revenue 6% 4% 2% 0% $2.50 $2.00 $2.12 Adjusted EPS $1.67 $1.50 $1.00 $1.11 $0.50 $ Source: Derived from Company data.

13 Current Financial Focus Cash from Operations Working Capital Percentage of Revenues $200 $150 $100 $50 $- Working Capital 18% 15% 14% $176 $151 $129 22% 20% 18% 16% 14% 12% 10% 8% $100 Cash from Operations $50 $56 $46 $37 Focus on near term working capital opportunities. 13 $0 Source: Derived from Company data and Company s FY16 Form 10-K.

14 Net Debt Dividends Dividend Yield Shares Driving Shareholder Value $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 Annual Dividends $0.36 $0.40 1% 2% $0.44 3% 5% 4% 3% 2% 1% Shares Outstanding - Year End % % $0.00 0% 10.0 $200 $150 $100 $50 $130 Net Debt $114-12% $96-16% Over the last 3 years, $55 million allocated to Dividends and Share repurchases. Focus on near term working capital opportunities and reducing debt. $0 Source: Derived from Company data and Company s FY16 Form 10-K. 14

15 Capital Deployment: FY14-FY16 Debt Repayments 45% Dividends 12% Common Stock Repurchases 24% Capital Expenditures 17% Acquisitions 2% Balanced Capital Allocation Approach Cash Flow from Operations $ Common Stock Repurchases $ 37.0 Acquisitions-related activity $ 2.3 Capital Expenditures $ 26.3 Dividends $ 18.2 Debt Repayments $ 69.6 Total $ $0.12 Quarterly Dividend for 1Q17 15 Source: Derived from Company data.

16 GAAP/Non-GAAP reconciliation Operating Income $ (108.4) $ 28.6 $ (187.8) Reconciling Items $ $ 17.4 $ Adjusted Operating Income $ 61.5 $ 46.0 $ 33.3 Reconciling items of $169.9 in FY14 include $154.4 of asset impairment charges, $12.0 of intangibles amortization, and $3.4 of restructuring expenses. Reconciling items of $17.4 in FY15 include $10.5 of intangibles amortization and $6.9 of restructuring expenses. Reconciling items of $221.1 in FY16 include $192.2 of asset impairment charges, $10.3 of intangibles amortization, $8.8 of restructuring expenses, $6.0 of inventory reserve write-offs, $2.4 of AR reserve write-offs, and $1.5 of CEO transition costs. Net Income $ (115.9) $ 15.3 $ (171.1) Provision (benefit) for income taxes $ 1.6 $ 8.2 $ (22.0) Income (loss) before provision for income taxes $ (114.3) $ 23.5 $ (193.1) Reconciling Items $ $ 16.3 $ Operating EBIT $ 55.5 $ 39.8 $ 27.7 Operational income taxes $ 21.9 $ 14.0 $ 10.7 Operating Net Income $ 33.6 $ 25.8 $ 17.0 Diluted Shares Operating EPS Reconciling items of $169.8 in FY14 include $154.4 of asset impairment charges, $12.0 of intangibles amortization, $3.4 of restructuring expenses, $0.8 of joint venture investment loss, and ($0.8) of changes in the fair value of interest-rate swaps. Restructuring items of $16.3 in FY15 include $10.5 of intangibles amortization, $6.9 of restructuring expenses, and ($1.1) of changes in the fair value of interest-rate swaps. Restructuring items of $220.8 in FY16 include $192.2 of asset impairment charges, $10.3 of intangibles amortization, $8.8 of restructuring expenses, $6.0 of inventory reserve write-offs, $2.4 of AR reserve write-offs, $1.5 of CEO transition costs, and ($0.4) of changes in the fair value of interest-rate swaps. 16 Source: Derived from Company data.

17 Questions