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Black Box Corporation Reports Fourth Quarter of Fiscal 2014 Results

Companies mentioned in this article: Black Box Corporation

PITTSBURGH -- (BUSINESS WIRE) -- 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 fourth quarter of Fiscal 2014 and twelve-month period ended March 31, 2014.

4Q14 Results

  • Revenues were $238.3 million, consistent with $237.7 million for the same period last year and down 1% from $239.7 million in the sequential period.
  • Benefit for income taxes was $11.1 million (7.6% effective rate) compared to provision for income taxes of $4.4 million (38.0% effective rate) for the same period last year and provision for income taxes of $2.5 million (27.5% effective rate) in the sequential period. The decrease in the effective tax rate is due to $114.9 million of non-deductible goodwill impairment loss.
  • Net loss was $135.0 million, which included a $154.4 million ($140.2 million after tax) goodwill impairment loss that is discussed in the Form 8-K furnishing this release, compared to net income of $7.2 million for the same period last year and net income of $6.7 million in the sequential period.
  • Diluted loss per share was $8.65 compared to Diluted earnings per share of $0.44 for the same period last year and $0.42 in the sequential period.
  • Operating net income* was $7.6 million, down 31% from $10.9 million for the same period last year and down 2% from $7.7 million in the sequential period.
  • Operating EPS* was $0.48, down 28% from $0.67 for the same period last year and down 2% from $0.49 in the sequential period.
  • Cash flow provided by operations was $28.4 million compared to $16.0 million for the same period last year and cash flow used for operations of $1.6 million in the sequential period.
  • We returned $4.4 million to our shareholders by repurchasing $3.0 million of common stock and paying $1.4 million in dividends. We also reduced long-term debt by $18.9 million.

Fiscal 2014 Results

  • Revenues were $971.7 million, down 3% from $997.8 million for the same period last year.
  • Provision for income taxes was $1.6 million ((1.4)% effective rate) compared to $17.7 million (38.0% effective rate) for the same period last year. The decrease in the effective tax rate is due to $114.9 million of non-deductible goodwill impairment loss, a decrease in uncertain income tax positions (including interest and penalties) and the benefit associated with the Fiscal 2013 federal return to provision reconciliation partially offset by the write-off of certain deferred tax assets related to equity awards.
  • Net loss was $115.9 million, which included a $154.4 million ($140.2 million after tax) goodwill impairment loss that is discussed in the Form 8-K furnishing this release, compared to net income of $28.8 million for the same period last year.
  • Diluted loss per share was $7.33 compared to Diluted earnings per share of $1.73 for the same period last year.
  • Operating net income* was $33.7 million, down 25% from $44.6 million for the same period last year.
  • Operating EPS* was $2.12, down 21% from $2.67 for the same period last year.
  • Cash flow provided by operations was $56.3 million, up 21% from $46.7 million for the same period last year.
  • We returned $27.4 million to our shareholders by repurchasing $21.8 million of common stock and paying $5.6 million in dividends. We also reduced long-term debt by $27.4 million.

* 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.

Commenting on the fourth quarter of Fiscal 2014 results, Michael McAndrew, President and Chief Executive Officer, said, "Our fourth quarter and Fiscal 2014 results demonstrate the progress that we are making in the transformation of Black Box. During Fiscal 2014, we initiated a number of programs to build more flexible and scalable product and service platforms. Our fourth quarter results are evidence that those investments are paying off with a change in the trajectory of our business. I am confident that our new fiscal year will show continued progress on our journey with revenue growth, continued investment in new initiatives, and value creation for our clients and shareholders."

Guidance

For the first quarter of Fiscal 2015, the Company is targeting:

  • Revenues in the range of $240 million to $245 million.
  • Operating earnings per share in the range of $0.40 to $0.45.

For Fiscal 2015, the Company is targeting:

  • Revenues in the range of $985 million to $1.005 billion.
  • Operating earnings per share in the range of $2.07 to $2.27.

Included in these targets is an effective tax rate of 39.0%. These targets exclude intangibles amortization, restructuring expense and the impact of changes in the fair market value of the Company's interest-rate swaps, and are before any new mergers and acquisition activity that has not been announced.

Earnings Conference Call

The Company will conduct a conference call beginning at 5:00 p.m. Eastern Daylight Time today, May 8, 2014. Michael McAndrew, President and Chief Executive Officer, will host the call. To participate in the call, please dial 612-332-0107 approximately 15 minutes prior to the starting time and ask to be connected to the Black Box Earnings Call. A replay of the conference call will be available for one week after the teleconference by dialing 320-365-3844 and using access code 325459. A live, listen-only audio webcast of the call will be available through a link on the Investor Relations page of the Company's Web site at http://www.blackbox.com. A webcast replay of the call will also be archived on Black Box's Web site for a limited period of time following the conference call.

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 over 4,000 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.

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 corporate compliance requirements, cash flows, global economic and business conditions, successful integration of acquisitions, the timing and costs of restructuring programs, successful marketing of the Company's product and services offerings, successful implementation of the Company's M&A program, including identifying appropriate targets, consummating transactions and successfully integrating the businesses, successful implementation of our 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, 2013. 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.

           
 

BLACK BOX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

 
In millions and may not foot due to rounding         March 31, 2014     March 31, 2013
Assets
Cash and cash equivalents $ 30.8 $ 30.7
Accounts receivable, net 156.5 153.0
Inventories, net 52.2 55.5
Costs/estimated earnings in excess of billings on uncompleted contracts 89.8 101.5
Other assets 27.0       26.1  
Total current assets 356.3 366.7
Property, plant and equipment, net 29.1 27.7
Goodwill, net 193.0 345.4
Intangibles, net 98.6 110.7
Other assets 35.3       27.5  
Total assets $ 712.3       $ 878.0  
Liabilities
Accounts payable $ 64.6 $ 66.2
Accrued compensation and benefits 26.1 25.2
Deferred revenue 33.8 33.9
Billings in excess of costs/estimated earnings on uncompleted contracts 15.9 13.4
Income taxes 3.2 6.7
Other liabilities 37.0       37.1  
Total current liabilities 180.6 182.5
Long-term debt 160.4 187.6
Other liabilities 20.1       25.7  
Total liabilities $ 361.2 $ 395.8
Stockholders’ equity
Common stock $ $
Additional paid-in capital 492.4 486.1
Retained earnings 249.2 370.8
Accumulated other comprehensive income 7.3 1.5
Treasury stock, at cost (397.9 )     (376.1 )
Total stockholders’ equity $ 351.1       $ 482.2  
Total liabilities and stockholders’ equity $ 712.3       $ 878.0  
                         
 
 
 

BLACK BOX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

               
In millions, except per share amounts and may not foot due to rounding         4Q14   3Q14   4Q13   FY14   FY13
Revenues
Products $ 46.2 $ 44.5 $ 45.2 $ 182.2 $

186.3

 

Services 192.1     195.2     192.5     789.5     811.5  
Total 238.3 239.7 237.7 971.7 997.8
Cost of sales
Products 27.0 25.8 25.0 105.5 103.9
Services 135.7     140.2     133.9     562.6     574.0  
Total 162.6 165.9 158.8 668.1 677.9
Gross profit 75.6 73.8 78.9 303.6 319.9
Selling, general & administrative expenses 63.4 60.4 62.8 245.5 249.9
Goodwill impairment loss 154.4 154.4
Intangibles amortization 2.7     2.9     3.3     12.0     13.7  
Operating income (loss) (144.9 ) 10.5 12.7 (108.4 ) 56.3
Interest expense (income), net 1.1 1.2 1.1 4.6 6.1
Other expenses (income), net 0.1     0.1     (0.1 )   1.2     3.7  
Income (loss) before provision for income taxes (146.1 ) 9.2 11.7 (114.2 ) 46.5
Provision (benefit) for income taxes (11.1 )   2.5     4.4     1.6     17.7  
Net income (loss) $ (135.0 )   $ 6.7     $ 7.2     $ (115.9 )   $ 28.8  
Earnings (loss) per common share
Basic $ (8.65 )   $ 0.42     $ 0.45     $ (7.33 )   $ 1.73  
Diluted $ (8.65 )   $ 0.42     $ 0.44     $ (7.33 )   $ 1.73  
Weighted-average common shares outstanding
Basic 15.6     15.8     16.2     15.8     16.6  
Diluted 15.6     15.9     16.3     15.8     16.7  
Dividends per share         $ 0.09     $ 0.09     $ 0.08     $ 0.36     $ 0.32  
 
 
 

BLACK BOX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

               
In millions and may not foot due to rounding         4Q14   3Q14   4Q13   FY14   FY13
Operating Activities
Net income (loss) $ (135.0 ) $ 6.7 $ 7.2 $ (115.9 ) $ 28.8
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities
Intangibles amortization and depreciation 4.3 4.6 4.7 18.2 19.1
Loss (gain) on sale of property 0.1 0.1 (0.1 )
Deferred taxes (13.7 ) 0.4 0.6 (8.7 ) 3.5
Stock compensation expense 1.1 1.5 1.3 6.6 7.7
Change in fair value of interest-rate swaps (0.2 ) (0.2 ) (0.3 ) (0.8 ) 0.6
Goodwill impairment loss 154.4 154.4
Joint venture investment loss 0.8 2.7
Changes in operating assets and liabilities (net of acquisitions)
Accounts receivable, net 11.4 (19.2 ) 4.7 (2.9 ) 10.0
Inventories, net 0.5 (1.1 ) 0.5 3.3 1.2
Costs/estimated earnings in excess of billings on uncompleted contracts 2.1 12.1 8.8 11.8 (13.9 )
All other assets (2.0 ) (1.0 ) (3.9 ) (0.8 ) (2.5 )
Billings in excess of costs/estimated earnings on uncompleted contracts 0.3 0.9 (4.8 ) 2.5 (0.9 )
All other liabilities 5.3     (6.4 )   (3.0 )   (12.4 )   (9.6 )
Net cash provided by (used for) operating activities $ 28.4 $ (1.6 ) $ 16.0 $ 56.3 $ 46.7
Investing Activities
Capital expenditures $ (1.8 ) $ (1.5 ) $ (2.2 ) $ (7.3 ) $ (6.3 )
Capital disposals 0.2 0.4
Acquisition of businesses (payments)/recoveries
Prior merger-related (payments)/recoveries             (0.8 )   (2.4 )
Net cash provided by (used for) investing activities $ (1.8 ) $ (1.5 ) $ (2.1 ) $ (8.1 ) $ (8.3 )
Financing Activities
Proceeds (repayments) from long-term debt $ (18.9 ) $ 6.2 $ (4.2 ) $ (27.4 ) $ 7.7
Proceeds (repayments) from short-term debt (1.7 ) 2.9 (1.4 ) 2.3 4.0
Deferred financing costs
Purchase of treasury stock (3.0 ) (6.0 ) (4.2 ) (21.8 ) (37.2 )
Proceeds from the exercise of stock options 1.0
Payment of dividends (1.4 ) (1.4 ) (1.3 ) (5.6 ) (5.2 )
Increase (decrease) in cash overdrafts 0.2     (0.5 )   (0.7 )   (0.5 )   1.2  
Net cash provided by (used for) financing activities $ (24.9 ) $ 1.2 $ (11.8 ) $ (52.0 ) $ (29.5 )
Foreign currency exchange impact on cash $ 3.4     $ 0.6     $ (0.9 )   $ 3.9     $ (0.7 )
Increase/(decrease) in cash and cash equivalents $ 5.2 $ (1.2 ) $ 1.3 $ 0.1 $ 8.3
Cash and cash equivalents at beginning of period 25.6     26.8     29.5     30.7     22.4  
Cash and cash equivalents at end of period $ 30.8     $ 25.6     $ 30.7     $ 30.8     $ 30.7  
                                               
 

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"), Adjusted 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, goodwill impairment loss and the joint venture investment loss (FY14 loss relates to the write-off of certain non-operating items due to the expected divestiture of our non-controlling interest in Genesis Networks Integration Services, LLC. ("GNIS") while the FY13 loss relates to the expected divestiture of our non-controlling interest in GNIS), each of which are non-cash charges, and restructuring, which is a cash charge.

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         4Q14   3Q14   4Q13   FY14   FY13
Net income (loss)         $ (135.0 )   $ 6.7   $ 7.2   $ (115.9 )   $ 28.8
Provision (benefit) for income taxes (11.1 ) 2.5 4.4 1.6 17.7
Effective tax rate 7.6 %   27.5 %   38.0 %   (1.4 )%   38.0 %
Income (loss) before provision for income taxes $ (146.1 ) $ 9.2 $ 11.7 $ (114.2 ) $ 46.5
 
Adjustments
Intangible amortization $ 2.7 $ 2.9 $ 3.3 $ 12.0 $ 13.7
Change in fair value of interest-rate swaps (0.2 ) (0.2 ) (0.3 ) (0.8 ) 0.6
Restructuring expense 1.7 0.8 3.0 3.4 8.4
Goodwill impairment loss 154.4 154.4
Joint venture investment loss             0.8     2.7  
Total pre-tax adjustments $ 158.6 $ 3.5 $ 6.0 $ 169.8 $ 25.4
 
Operating EBIT $ 12.6 $ 12.8 $ 17.7 $ 55.6 $ 71.9
Operational effective tax rate 39.5 % 39.5 % 38.0 % 39.5 % 38.0 %
Operational income taxes (1) 5.0   5.0   6.7   22.0   27.3  
Operating net income         $ 7.6     $ 7.7     $ 10.9     $ 33.7     $ 44.6  
(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.
 

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

          4Q14   3Q14   4Q13   FY14   FY13
Diluted earnings (loss) per share         $ (8.65 )   $ 0.42   $ 0.44   $ (7.33 )   $ 1.73
EPS impact * 9.13     0.07     0.23     9.45     0.94
Operating EPS         $ 0.48     $ 0.49     $ 0.67     $ 2.12     $ 2.67
*   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         4Q14   4Q13   % Change
Revenues         $ 238.3   $ 237.7   %
Foreign currency impact - North America Products 0.1
Foreign currency impact - North America Services 0.3
Foreign currency impact - International Products
Foreign currency impact - International Services (0.3 )  
Revenues (excluding foreign currency)         $ 238.4     $ 237.7     %
 

Information on quarterly revenues excluding foreign currency compared to the sequential quarter is presented below:

In millions and may not foot due to rounding         4Q14   3Q14   % Change
Revenues         $ 238.3   $ 239.7   (1 )%
Foreign currency impact - North America Products 0.1
Foreign currency impact - North America Services 0.1
Foreign currency impact - International Products (0.1 )
Foreign currency impact - International Services (0.1 )    
Revenues (excluding foreign currency)         $ 238.3     $ 239.7     (1 )%
 

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         FY14   FY13   % Change
Revenues         $ 971.7   $ 997.8   (3 )%
Foreign currency impact - North America Products 0.3
Foreign currency impact - North America Services 0.7
Foreign currency impact - International Products 0.9
Foreign currency impact - International Services (0.4 )    
Revenues (excluding foreign currency)         $ 973.2     $ 997.8     (2 )%
 

Segment Information

In connection with a new management team and a renewed business strategy, the Company has realigned its organizational structure which resulted in new operating segments (North America Products, North America Services, International Products and International Services) for the purpose of making operational decisions and assessing financial performance which was effective, on a prospective basis, beginning on April 1, 2013. The Company has restated prior period information to conform to the current year's presentation. 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, goodwill impairment loss and restructuring expense.

A reconciliation of Operating income (loss) to Adjusted operating income (by segment) is presented below:

        4Q14     3Q14     4Q13     FY14     FY13

In millions and may not foot due to rounding

        $  

% of
Rev

    $  

% of
Rev

    $  

% of
Rev

    $  

% of
Rev

    $  

% of
Rev

Revenues                          
North America Products $ 20.7 $ 19.5 $ 20.4 $ 82.8 $ 87.1
International Products 25.6   25.0   24.8   99.3   99.2  
Total Products $ 46.2 $ 44.5 $ 45.2 $ 182.2 $ 186.3
North America Services $ 183.5 $ 185.8 $ 184.1 $ 753.5 $ 775.9
International Services 8.5   9.3   8.4   36.0   35.6  
Total Services $ 192.1   $ 195.2   $ 192.5   $ 789.5   $ 811.5  
Total $ 238.3 $ 239.7 $ 237.7 $ 971.7 $ 997.8
Gross profit
North America Products $ 8.4 40.5% $ 8.0 40.8% $ 8.9 43.6% $ 34.6 41.8% $ 38.4 44.1%

International Products

10.9   42.6% 10.8   43.2% 11.3   45.7% 42.1   42.3% 44.0   44.4%
Total Products $ 19.2 41.6% $ 18.8 42.2% $ 20.2 44.7% $ 76.7 42.1% $ 82.4 44.2%
North America Services $ 54.8 29.9% $ 53.1 28.6% $ 56.6 30.7% $ 219.3 29.1% $ 228.5 29.5%
International Services 1.6   18.8% 1.9   20.0% 2.0   24.3% 7.6   21.0% 9.0   25.3%
Total Services $ 56.4   29.4% $ 55.0   28.2% $ 58.6   30.5% $ 226.9   28.7% $ 237.5   29.3%
Total $ 75.6 31.7% $ 73.8 30.8% $ 78.9 33.2% $ 303.6 31.2% $ 319.9 32.1%
Operating income (loss)
North America Products $ (41.2 ) (199.4)% $ 1.1 5.8% $ 1.8 8.8% $ (36.1 ) (43.6)% $ 9.0 10.3%
International Products (18.8 ) (73.7)% 1.4   5.6% 1.5   6.1% (14.8 ) (14.9)% 7.0   7.0%
Total Products $ (60.0 ) (129.9)% $ 2.5 5.7% $ 3.3 7.3% $ (50.9 ) (28.0)% $ 15.9 8.6%
North America Services $ (79.8 ) (43.5)% $ 8.3 4.4% $ 9.4 5.1% $ (52.4 ) (7.0)% $ 38.4 5.0%
International Services (5.1 ) (59.2)% (0.3 ) (3.2)% 0.1   0.8% (5.0 ) (13.9)% 1.9   5.3%
Total Services $ (84.8 ) (44.2)% $ 8.0   4.1% $ 9.4   4.9% $ (57.4 ) (7.3)% $ 40.3   5.0%
Total $ (144.9 ) (60.8)% $ 10.5 4.4% $ 12.7 5.3% $ (108.4 ) (11.2)% $ 56.3 5.6%
Adjustments
North America Products $ 42.7 $ 0.2 $ 0.2 $ 42.9 $ 0.7
International Products 20.4   0.2   1.1   20.8   1.9  
Total Products $ 63.2 $ 0.4 $ 1.4 $ 63.7 $ 2.6
North America Services $ 90.5 $ 3.3 $ 4.9 $ 100.9 $ 19.3
International Services 5.2   0.1   0.1   5.4   0.3  
Total Services $ 95.7   $ 3.4   $ 4.9   $ 106.2   $ 19.6  
Total $ 158.8 $ 3.8 $ 6.3 $ 169.9 $ 22.2
Adjusted operating income
North America Products $ 1.5 7.4% $ 1.3 6.6% $ 2.0 10.0% $ 6.8 8.2% $ 9.7 11.1%
International Products 1.6   6.3% 1.6   6.5% 2.6   10.5% 5.9   5.9% 8.8   8.9%
Total Products $ 3.2 6.8% $ 2.9 6.5% $ 4.6 10.3% $ 12.7 7.0% $ 18.5 9.9%
North America Services $ 10.7 5.8% $ 11.5 6.2% $ 14.2 7.7% $ 48.4 6.4% $ 57.7 7.4%
International Services 0.1   1.3% (0.2 ) (1.9)% 0.1   1.7% 0.3   0.9% 2.2   6.2%
Total Services $ 10.8   5.6% $ 11.3   5.8% $ 14.4   7.5% $ 48.8   6.2% $ 59.9   7.4%
Total         $ 14.0     5.9%     $ 14.3     5.9%     $ 19.0     8.0%     $ 61.5     6.3%     $ 78.5     7.9%
 

EBITDA and Adjusted 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. Adjusted EBITDA, defined as EBITDA plus stock compensation expense, the goodwill impairment loss and the joint venture investment loss may also be used to measure the Company's ability to service its debt.

A reconciliation of Net income (loss) to EBITDA and Adjusted EBITDA is presented below:

In millions and may not foot due to rounding         4Q14   3Q14   4Q13   FY14   FY13
Net income (loss)         $ (135.0 )   $ 6.7   $ 7.2   $ (115.9 )   $

28.8

 

Provision (benefit) for income taxes (11.1 ) 2.5 4.4 1.6 17.7
Interest expense (income), net 1.1 1.2 1.1 4.6 6.1
Intangibles amortization and depreciation 4.3     4.6     4.7     18.2     19.1  
EBITDA $ (140.7 ) $ 15.0 $ 17.5 $ (91.4 ) $ 71.7
Stock compensation expense 1.1 1.5 1.3 6.6 7.7
Goodwill impairment loss 154.4 154.4
Joint venture investment loss             0.8     2.7  
Adjusted EBITDA         $ 14.9     $ 16.5     $ 18.8     $

70.5

    $ 82.1  
 

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 Proceeds from stock option exercises, plus or minus Foreign currency exchange impact on cash, 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         4Q14   3Q14   4Q13   FY14   FY13
Net cash provided by (used for) operating activities         $ 28.4   $ (1.6 )   $ 16.0   $ 56.3   $ 46.7
Net capital expenditures (1.8 ) (1.5 ) (2.1 ) (7.3 ) (5.9 )
Foreign currency exchange impact on cash 3.4     0.6     (0.9 )   3.9     (0.7 )
Free cash flow before stock option exercises $ 30.1 $ (2.4 ) $ 13.0 $ 52.9 $ 40.1
Proceeds from the exercise of stock options             1.0      
Free cash flow         $ 30.1     $ (2.4 )   $ 13.0     $ 53.9     $ 40.1  
 

Significant Balance Sheet ratios and Other Information

Information on certain balance sheet ratios, backlog and headcount is presented below:

Dollars In millions         4Q14   3Q14   4Q13
Days sales outstanding         54 days   61 days   54 days
Aggregate days sales outstanding 86 days 89 days 90 days
Net inventory turns 9.3x 9.3x 8.5x
Six-month order backlog $ 183.4 $ 167.5 $ 201.4
Team members 3,959 4,067 3,900
Net debt $ 129.8 $ 153.9 $ 157.0
Leverage ratio         2.3   2.5   2.3
 


Copyright © Business Wire 2014
Contact:

Black Box Corporation
Gary Doyle, 724-873-6788
Vice President of Corporate Communications and Investor Relations
Email: investors@blackbox.com