-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Sia/z+FBNkyPjWqEW2Bv1dtt4cniyrOmnAR/TuqsiZD1mCZsU6mRt4NfFrgW/p1v PQgHJAa+Fwfc5uquS2tbeA== 0000950128-97-000885.txt : 19970812 0000950128-97-000885.hdr.sgml : 19970812 ACCESSION NUMBER: 0000950128-97-000885 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970811 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLACK BOX CORP CENTRAL INDEX KEY: 0000849547 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER COMMUNICATIONS EQUIPMENT [3576] IRS NUMBER: 953086563 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18706 FILM NUMBER: 97655836 BUSINESS ADDRESS: STREET 1: 1000 PARK DR CITY: LAWRENCE STATE: PA ZIP: 15055 BUSINESS PHONE: 4128736788 FORMER COMPANY: FORMER CONFORMED NAME: BLACK BOX INCORPORATED DATE OF NAME CHANGE: 19910825 10-Q 1 BLACK BOX CORP. 1 1998 First Quarter SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997 COMMISSION FILE NO. 0-18706 BLACK BOX CORPORATION (Exact name of registrant as specified in its charter) Delaware 95-3086563 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1000 Park Drive Lawrence, Pennsylvania 15055 (Address of principal executive offices) 412-746-5500 Registrant's telephone number, including area code Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- The number of shares outstanding of the Registrant's common stock, $.001 par value, as of August 1, 1997 was 16,593,641 shares. 2 PART I FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS BLACK BOX CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts)
(Unaudited) June 30, March 31, 1997 1997 --------- --------- ASSETS Current assets: Cash and cash equivalents $ 1,009 $ 1,353 Accounts receivable, net of allowance for doubtful accounts of $2,365 and $2,499, respectively 43,857 43,900 Inventories, net 36,434 30,435 Other current assets 10,354 8,227 --------- --------- Total current assets 91,654 83,915 Property, plant and equipment, net of accumulated depreciation of $12,383 and $9,939, respectively 12,892 12,923 Intangibles, net of accumulated amortization of $22,101 and $18,339, respectively 75,019 75,955 Other assets 465 486 --------- --------- Total assets $ 180,030 $ 173,279 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current debt $ 10,360 $ 8,128 Accounts payable 20,637 19,924 Other accrued expenses 7,887 11,815 Accrued income taxes 5,941 5,816 --------- --------- Total current liabilities 44,825 45,683 Long-term debt 21,167 21,175 Other liabilities, primarily deferred taxes 12,106 12,157 Stockholders' equity: Preferred stock authorized 5,000,000; par value $1.00; none issued and outstanding Common stock authorized 20,000,000; par value $.001; issued and outstanding 16,590,309 and 16,518,682, respectively 17 17 Additional paid-in capital 30,731 29,897 Retained earnings 73,231 66,504 Cumulative foreign currency translation adjustments (2,047) (2,154) --------- --------- Total stockholders' equity 101,932 94,264 --------- --------- Total liabilities and stockholders' equity $ 180,030 $ 173,279 ========= =========
See Notes to Consolidated Financial Statements 2 3 BLACK BOX CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands, except per share amounts)
Three month period ended June 30, 1997 1996 ---------- ---------- Revenues $ 64,198 $ 53,788 Cost of sales 31,200 24,810 ---------- ---------- Gross profit 32,998 28,978 Selling, general and administrative expenses 19,546 17,621 Intangibles amortization 954 963 ---------- ---------- Operating income 12,498 10,394 Interest expense, net 808 1,126 Other (income)/expense, net 96 (26) ---------- ---------- Income before income taxes 11,594 9,294 Provision for income taxes 4,867 4,089 ---------- ---------- Net income $ 6,727 $ 5,205 ========== ========== Earnings per share $ 0.39 $ 0.31 ========== ========== Weighted average common and common equivalent shares $ 17,463 $ 17,016 ========== ==========
See Notes to Consolidated Financial Statements 3 4 BLACK BOX CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (Dollars in thousands)
Common Stock Additional ---------------------- Paid-in Retained Translation Shares Amount Capital Earnings Adjustment Total ----------- ---------- ---------- -------- ----------- ----- Balance at March 31, 1996 16,302,254 $ 16 $ 25,904 $ 42,209 $ (988) $ 67,141 Net income for the year ended March 31, 1997 - - - 24,295 - 24,295 Exercise of options 216,428 1 2,473 - - 2,474 Tax benefit from exercised options - - 1,520 - - 1,520 Foreign currency translation adjustments - - - - (1,166) (1,166) ----------- ---- -------- -------- -------- --------- Balance at March 31, 1997 16,518,682 17 29,897 66,504 (2,154) 94,264 Net income for the three month period ended June 30, 1997 - - - 6,727 - 6,727 Exercise of options 71,627 - 542 - - 542 Tax benefit from exercised options - - 292 - - 292 Foreign currency translation adjustments - - - - 107 107 ---------- ---- -------- -------- -------- --------- Balance at June 30, 1997 16,590,309 $ 17 $ 30,731 $ 73,231 $ (2,047) $ 101,932 ========== ==== ======== ======== ======== =========
See Notes to Consolidated Financial Statements 4 5 BLACK BOX CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in thousands)
Three month period ended June 30, 1997 1996 --------- --------- Cash flows from operating activities: Net income $ 6,727 $ 5,205 Adjustments to reconcile net income to cash provided by operating activities: Intangibles amortization 936 946 Depreciation 603 557 Other (38) (21) Changes in working capital items: Account receivable, net 43 296 Inventories, net (6,023) (1,722) Other current assets (2,086) 1,032 Accounts payable and accrued liabilities (3,175) (2,627) --------- --------- Cash (used in) provided by operating activities (2,937) 3,666 --------- --------- Cash flows from investing activities: Capital expenditures (572) (541) --------- --------- Cash used in investing activities (572) (541) --------- --------- Cash flows from financing activities: Repayment of borrowings (32,004) (21,400) Proceeds from borrowings 34,228 18,348 Proceeds from exercise of options 834 478 --------- --------- Cash provided by (used in) financing activities 3,058 (2,574) --------- --------- Foreign currency translation adjustment 107 (304) --------- --------- (Decrease)/increase in cash and cash equivalents (344) 247 Cash and cash equivalents at beginning of period 1,353 1,924 --------- --------- Cash and cash equivalents at end of period $ 1,009 $ 2,171 ========= =========
See Notes to Consolidated Financial Statements 5 6 BLACK BOX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars in thousands, except per-share amounts) NOTE 1 - BASIS OF PRESENTATION The Financial Statements presented herein and these notes are unaudited. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Although the Company believes that all adjustments necessary for a fair presentation have been made, interim periods are not necessarily indicative of the results of operations for a full year. As such, these financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's most recent Form 10-K which was filed with the SEC for the fiscal year ended March 31, 1997. NOTE 2 - FISCAL YEARS AND INTERIM PERIODS The Company has a 52 or 53 week fiscal year that ends on the Sunday nearest March 31. Each fiscal quarter consists of 13 weeks. The last quarter is adjusted for those years which have 53 weeks. The ending dates for the periods ended June 30, 1997, March 31, 1997 and June 30, 1996 were actually June 29, 1997, March 30, 1997 and June 30, 1996, respectively. NOTE 3 - INVENTORIES Inventories are stated at the lower of cost or market (first-in, first-out method) or market. The net inventory balances are as follows:
June 30, March 31, 1997 1997 -------- -------- Raw materials $ 2,237 $ 2,152 Work-in-process 76 28 Finished goods 36,034 29,865 Inventory reserve (1,913) (1,610) -------- -------- Inventory, net $ 36,434 $ 30,435 ======== ========
6 7 BLACK BOX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars in thousands, except per-share amounts) NOTE 4 - FINANCIAL DERIVATIVES The Company has entered and will continue in the future, on a selective basis, to enter into forward exchange contracts to reduce the foreign currency exposure related to certain intercompany transactions. On a monthly basis, the open contracts are revalued to the current exchange rates and the resulting gains and losses are recorded in other income. These gains and losses offset the revaluation of the related foreign currency denominated receivables. At June 30,1997, the open foreign exchange contracts were exclusively in Yen. These open contracts were valued at approximately $8.2 million, with contract rates ranging from 112.25 to 116.25 Yen to U.S. dollars, and will expire over the next nine months. The effect of these contracts on net income for the three month period ended June 30, 1997 was not material. NOTE 5 - ADOPTION OF NEW ACCOUNTING STANDARDS In February 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 128 "Earnings per Share", which establishes new standards for computing and presenting earnings per share ("EPS"). As required by the SFAS, the Company will adopt the new standard in the quarter ended December 31, 1997, and restate all prior periods. The Company has reviewed SFAS No. 128 and determined that had the SFAS been adopted for the First Quarter 1998, basic and diluted EPS would have been $0.41 and $0.39, respectively. In June 1997, the FASB issued SFAS No. 130 "Reporting Comprehensive Income", which establishes standards for reporting and display of comprehensive income and its components in financial statements. As required by the SFAS, the Company expects to adopt the new standard in the first quarter of Fiscal 1999. The Company has reviewed SFAS No. 130 and determined that the only component of comprehensive income which applies to the Company will be foreign currency translation adjustments currently recorded directly to Stockholder's Equity in accordance with SFAS No. 52. 7 8 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (dollars in thousands) GENERAL FORWARD-LOOKING STATEMENTS When included in this Quarterly Report on Form 10-Q or in documents incorporated herein by reference, the words "expects," "intends," "anticipates," "believes," "estimates," and analogous expressions are intended to identify forward-looking statements. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include, among others, general economic and business conditions, competition, changes in foreign, political and economic conditions, fluctuating foreign currencies compared to the U.S. dollar, rapid changes in technologies, customer preferences and various other matters, many of which are beyond the Company's control. 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 Quarterly Report on Form 10-Q. 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. RESULTS OF OPERATIONS The table below should be read in conjunction with the following discussion (percentages are based on total revenues).
Three month period ended June 30, 1997 1996 -------- -------- Revenues $ 64,198 $ 53,788 -------- -------- Revenues: US/Canada 54.3% 54.9% International 45.7 45.1 -------- --------- Total 100.0 100.0 Cost of sales 48.6 46.1 -------- --------- Gross profit 51.4 53.9 Selling, general and administrative expenses 30.4 32.8 -------- --------- Operating income before amortization 21.0 21.1 Intangibles amortization 1.5 1.8 -------- --------- Operating income 19.5% 19.3% -------- ---------
8 9 Revenues for the three months ended June 30, 1997 ("First Quarter 1998") were $64,198, an increase of $10,410, or 19.4%, over the three months ended June 30, 1996 ("First Quarter 1997") revenues of $53,788. Revenues from International operations were $29,321, an increase of $5,046, or 20.8%, over First Quarter 1997 of $24,275. If exchange rates had remained constant from First Quarter 1997 to First Quarter 1998, revenues from International operations would have increased $6,520, or 26.9%. Reported revenue dollar and percentage growth of the Company's largest subsidiaries for the First Quarter 1998 were as follows: Japan increased $1,095 or 20%, United Kingdom increased $1,388 or 32%, France decreased $549 or 12% and Brazil increased $1,251 or 80%. The remaining international business units grew by $1,860 or 23% in the aggregate for the First Quarter 1998. Revenues in France for the First Quarter 1998 were flat on a local currency basis, but in U.S. dollars, were down 12% due to a stronger U.S. dollar compared to the same period last year. Revenues for the First Quarter 1998 from US/Canada were $34,877, an increase of $5,364, or 18.2%, over First Quarter 1997 revenues of $29,513. US/Canada revenue growth was driven by an increase in the number of medium and large orders shipped in the quarter and the continued success of new product sales. In the First Quarter 1998, medium and large orders represented approximately 40% of the US/Canada revenue compared to approximately 35% of the First Quarter 1997 US/Canada revenues. Gross profit in First Quarter 1998 increased to $32,998, or 51.4% of revenues, from $28,978, or 53.9% of revenues, in First Quarter 1997. The decrease in the gross profit margin of 2.5% is primarily due to the increase in medium and large orders, which generally receive a larger discount and earn a lower gross profit margin compared to small orders. Selling, general and administrative ("SG&A") expenses in First Quarter 1998 were $19,546, or 30.4% of revenues, an increase of $1,925 over SG&A expenses of $17,621, or 32.8% of revenues, in First Quarter 1997. SG&A decreased as a percentage of revenues as the Company was able to leverage its existing support structure. The dollar increase relates to additional marketing and personnel costs primarily at the international locations. Operating income before amortization in First Quarter 1998 increased to $13,452, or 21.0% of revenues, from $11,357, or 21.1% of revenues, in First Quarter 1997, as a result of higher revenues. Operating income in First Quarter 1998 increased to $12,498, or 19.5% of revenues, from $10,394 or 19.3% of revenues, in First Quarter 1997. Net interest expense in First Quarter 1998 declined to $808 from $1,126 in First Quarter 1997 as a result of lower average borrowings and lower average interest rates. The estimated annual effective income tax rate of 42.0% for Fiscal 1998 is higher than the U.S. statutory rate of 35.0% primarily due to state income taxes and the unfavorable impact of non-deductible intangibles amortization. 9 10 LIQUIDITY AND CAPITAL RESOURCES In the First Quarter 1998, the Company increased its total borrowings $2,224 to fund working capital requirements. This increase was primarily due to increased inventory levels as the Company purchased new product for its "New Product Supplement" catalog, mailed at the end of June. In addition, inventory levels were increased to support the overall business growth and to strengthen the Company's same-day order fulfillment rates. As of June 30, 1997, the Company had $1,009 in cash and cash equivalents, working capital of $46,829 and long-term debt of $21,167. The Company's long-term debt at June 30, 1997 was comprised of $13,100 under the Mellon Credit Agreement, dated as of May 6, 1994, among the Company and Mellon Bank, as amended (the "Mellon Credit Agreement"), $16,000 aggregate principal amount of 8.81% Senior Notes, and $2,427 of various other loans. The weighted average interest rate on all indebtedness of the Company as of June 30, 1997 was approximately 7.9% compared to 8.2% as of June 30, 1996. In addition, at June 30, 1997, the Company had $26,540 of additional funds available under the Mellon Credit Agreement. The Company has entered and will continue in the future, on a selective basis, to enter into forward exchange contracts to reduce the foreign currency exposure related to certain intercompany transactions. On a monthly basis, the open contracts are revalued to the current exchange rates and the resulting gains and losses are recorded in other income. These gains and losses offset the revaluation of the related foreign currency denominated receivables. At June 30,1997, the open foreign exchange contracts were exclusively in Yen. These open contracts were valued at approximately $8.2 million, with contract rates ranging from 112.25 to 116.25 Yen to U.S. dollars, and will expire over the next nine months. The effect of these contracts on net income for the three month period ended June 30, 1997 was not material. The Company believes that its cash flow from operations and existing credit facilities will be sufficient to satisfy its liquidity needs for the foreseeable future. ACCOUNTING STANDARDS In February 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 128 "Earnings per Share", which establishes new standards for computing and presenting earnings per share ("EPS"). As required by the SFAS, the Company will adopt the new standard in the quarter ended December 31, 1997, and restate all prior periods. The Company has reviewed SFAS No. 128 and determined that had the SFAS been adopted for the First Quarter 1998, basic and diluted EPS would have been $0.41 and $0.39, respectively. 10 11 In June 1997, the FASB issued SFAS No. 130 "Reporting Comprehensive Income", which establishes standards for reporting and display of comprehensive income and its components in financial statements. As required by the SFAS, the Company expects to adopt the new standard in the first quarter of fiscal 1999. The Company has reviewed SFAS No. 130 and determined that the only component of comprehensive income which applies to the Company will be foreign currency translation adjustments currently recorded directly to Stockholder's Equity in accordance with SFAS No. 52. ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. 21.0 Subsidiaries of the Company 27.0 Financial Data Schedules (b) Reports on Form 8-K. None. 11 12 SIGNATURE 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 thereunto duly authorized. BLACK BOX CORPORATION By: /s/ ANNA M. BAIRD ---------------------------- Anna M. Baird, Vice President and Chief Financial Officer August 8, 1997 12 13 EXHIBIT INDEX Exhibit - ------- No. - --- 21.0 Subsidiaries of the Company 27.0 Financial Data Schedule EX-21.0 2 BLACK BOX CORP. 1 Exhibit 21.0 SUBSIDIARIES OF THE COMPANY
NAME LOCATION STATE OF INCORPORATION - ---- -------- ---------------------- Black Box Corporation Lawrence, Pennsylvania, USA Delaware BBOX Holding Company Wilmington, Delaware, USA Delaware Black Box of Pennsylvania Lawrence, Pennsylvania, USA Delaware BB Technologies, Inc. Wilmington, Delaware, USA Delaware Black Box Foreign Sales Corporation St. Thomas, U.S.V.I. Black Box Communication SANV Zaventum, Belgium Black Box do Brazil Industria e Comercio Ltda. Sao Paulo, Brazil Black Box Canada Corporation Ontario, Canada Black Box Catalogue, Ltd. Reading, England Black Box France, S.A. Rungis, France Black Box Deutschland GmbH Munich, Germany Black Box Italia, SpA Vimodrone, Italy Black Box Japan Kabushiki Kaisha Tokyo, Japan Black Box de Mexico, S.A. de C.V. Mexico City, Mexico Black Box Datacom, B.V. Utrecht, Netherlands Datacom Black Box Services AG Altendorf, Switzerland Datacom Black Box Holding, AG Zug, Switzerland Black Box Australia Pty, Ltd. (1) Croydon VIC, Australia Black Box Catalog New Zealand Limited (1) Wellington, New Zealand
(1) Acquired in March 1997 EX-27 3 BLACK BOX CORP.
5 3-MOS MAR-31-1997 APR-01-1997 JUN-30-1997 1,009 0 46,222 2,365 36,434 91,654 25,275 12,383 180,030 44,825 0 0 0 17 101,915 180,030 64,198 64,198 31,200 31,200 20,596 0 808 11,594 4,867 6,727 0 0 0 6,727 0.39 0.39
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