EX-99.1 2 j2062501exv99w1.htm EX-99.1 EX-99.1
 

Exhibit 99.1
(BLACK BOX LOGO)
Michael McAndrew, Chief Financial Officer
Black Box Corporation
(724) 873-6788
(724) 873-6799 (fax)
Email: investors@blackbox.com
FOR IMMEDIATE RELEASE
BLACK BOX CORPORATION REPORTS FOURTH QUARTER
AND TOTAL YEAR FISCAL 2006 RESULTS
—  Total Year Revenues up 35% and GAAP EPS up 27%  —
PITTSBURGH, PENNSYLVANIA, June 1, 2006 — Black Box Corporation (NASDAQ:BBOX) today reported for the fourth quarter ended March 31, 2006 diluted earnings per share of 26¢ on net income of $4.7 million or 2.7% of revenues compared to break-even last year. On a sequential quarter comparison basis, third quarter diluted earnings per share were 70¢ with corresponding net income of $12.5 million or 6.9% of revenues. Excluding restructuring charges and reconciling items described below, diluted earnings per share for the fourth quarter 2006 were 53¢ and net income was $9.6 million or 5.5% of revenues compared to diluted earnings per share of 39¢ and net income of $6.8 million or 4.3% of revenues for the fourth quarter 2005. Management believes that presenting diluted earnings per share and net income excluding restructuring charges and reconciling items is useful to investors because it provides a more meaningful comparison of the ongoing operations of the Company.
During the fourth quarter of fiscal 2006, the Company incurred a pre-tax charge of $7.5 million related to reconciling items. Of this charge, $7.1 million relates to an adjustment of earnings over multiple years, from FY03 through FY06, from the Company’s Italian Operations (“Italian Operations Adjustment”). The Italian Operations Adjustment resulted from intentional misconduct by certain local operational and financial management of the Company’s Italian Operations acting in collusion with one another for the purpose of overstating local financial results. All involved team members have been terminated and the Company intends to pursue all available legal remedies against these individuals. The misconduct was recently brought to the Company management’s attention by a team member of the Italian Operations pursuant to the
1000 Park Drive, Lawrence, PA 15055-1018 * (724) 746-5500 * Fax (724) 746-0746

 


 

Page 2
Company’s “Open Door” Policy. Company management responded by immediately suspending the management team of the Italian Operations and conducting a full investigation of the matter. The Company believes that all accounting irregularities have been identified, corrective action taken, and that the Italian Operations Adjustment captures all necessary corrections. These corrections were not material to any prior reporting period.
Total revenues for the fourth quarter were $175 million, an increase of 11% from $157 million for the same period last year. On a sequential comparison basis, third quarter revenues were $182 million.
Fourth quarter cash provided by operating activities was approximately $13 million or 276% of net income, compared to $18 million for the same period last year. Fourth quarter free cash flow (defined below) was $19 million compared to $18 million last year. On a sequential comparison basis, third quarter cash provided by operating activities was $16 million or 131% of net income and free cash flow was $24 million. Black Box utilized its fourth quarter free cash flow of $19 million to fund debt reduction of $18 million and a dividend payment of $1 million. Management believes that free cash flow, defined by the Company as cash provided by operating activities less net capital expenditures, plus proceeds from option exercises, plus or minus foreign currency translation adjustments, is an important measurement of liquidity as it represents the total cash available to the Company.
For total fiscal 2006, diluted earnings per share were $2.13 compared to $1.68 for the same period last year, an increase of 27%. Corresponding net income for the year was $37.4 million or 5.2% of revenues, compared to $29.9 million or 5.6% of revenues for the same period last year. Excluding restructuring charges and reconciling items for fiscal years 2006 and 2005, diluted earnings per share were $2.81 and net income was $49.3 million or 6.8% of revenues in 2006 compared to diluted earnings per share of $2.13 and net income of $37.9 million or 7.1% of revenues in 2005.
Total pre-tax charges incurred for the fiscal year 2006 were: $5.4 million associated with acquisition-related expenses of Norstan; a restructuring charge of $5.3 million related to staffing level adjustments and real estate consolidations in Europe and North America; and a charge of $7.1 million related to the Italian Operations Adjustment.
1000 Park Drive, Lawrence, PA 15055-1018 * (724) 746-5500 * Fax (724) 746-0746

 


 

Page 3
Revenues for fiscal year 2006 were $721 million, an increase of 35% from $535 million for fiscal year 2005.
Cash provided by operating activities for the year was $52 million or 139% of net income, compared to $52 million or 175% of net income last year. Free cash flow was $72 million compared to $57 million last year. Black Box utilized the twelve-month free cash flow of $72 million to fund $41 million of acquisition-related activity; debt reduction of $27 million; and dividend payments of $4 million.
The Company’s 6-month order backlog was $96 million at March 31, 2006 compared to $97 million at the same period last year. On a sequential comparison basis, third quarter 6-month order backlog was $94 million.
For FY07, the Company expects total year reported revenues of approximately $1 billion. By 2Q07, the Company currently expects quarterly revenues in the range of $265 to $275 million; gross profit margin in the range of 37% to 38%; SG&A expenses in the range of 26% to 27%; corresponding EPS in the range of 90¢ to 95¢; and quarterly cash provided by operating activities in the range of $20 to $22 million.
All of the above ranges exclude acquisition-related expense and stock option-based expense (including the impact of FAS 123(R)), and are before any new mergers and acquisition activity that has not been announced.
Commenting on FY06 and the future outlook, Fred C. Young, Chief Executive Officer, said, “Black Box had many significant accomplishments in FY06. We are particularly pleased that strategically we have successfully positioned Black Box to reach the $1 billion revenue milestone in FY07, effectively doubling our business from 15 months ago. Achieving this $1 billion milestone 12 months ahead of our previously established timeframe is a significant event. On the other hand, as we conclude FY06 we are very disappointed by the situation in Italy. By no means do we believe this misconduct is representative of the overall integrity of the Black Box Team at large.
1000 Park Drive, Lawrence, PA 15055-1018 * (724) 746-5500 * Fax (724) 746-0746

 


 

Page 4
Mr. Young went on to say, “FY07 should be a record year for Black Box. We believe the 2Q07 timetable we have established to achieve our financial targets is reasonable given our historical track record, particularly with the experience and associated results of the Norstan acquisition.
“There was a tremendous amount of planning and execution required to ensure the NextiraOne transaction was completed in a manner which we felt would meet both our operational and financial objectives. We believe we have accomplished this. From an industry positioning perspective, this combination significantly strengthens Black Box’s leadership position for data, voice and hotline technical services.
“Our FY07 plan is to fully integrate NextiraOne into Black Box. We believe this will allow us to take full advantage of combined synergies in all functional areas. This applies particularly to marketing and operations, where we now have a significant increase in resources available to our clients, and the overall implementation of a much more efficient cost management philosophy. The Black Box technical services model is very unique in the industry and we believe provides the best value proposition to our clients.
“For FY07 we expect our revenue mix by technical service to be approximately 16% data services, 65% voice services and 19% hotline services. Geographically we expect our revenue mix to be approximately 85% North America and 15% International. Over time we will look to increase our International revenue mix.
“In closing, we have high expectations for the future of Black Box and will stay focused on the tasks at hand. Achieving these expectations will require us to successfully complete the integration of all of our FY06 acquisitions, aggressively sell our DVH services everyday throughout the world and continue to leverage our financial strength into significant growth by consummating high quality M&A opportunities.”
The historical information in this press release and the attached tables does not include the acquisitions of NextiraOne and NuVision which closed on April 30, 2006, and May 1, 2006, respectively.
1000 Park Drive, Lawrence, PA 15055-1018 * (724) 746-5500 * Fax (724) 746-0746

 


 

Page 5
The Company will conduct a conference call beginning at 5:00 p.m. Eastern Daylight Time today, June 1, 2006. Fred C. Young, Chief Executive Officer, will host the call. To participate in the call, please dial 612-332-1025 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 828910.
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. You can identify these forward-looking statements by the fact 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 conditions, successful integration of acquisitions, including the Norstan and NextiraOne businesses, the timing and costs of restructuring programs, successful marketing of DVH (Data, Voice, Hotline) services and successful implementation of our M&A program, including identifying appropriate targets, consummating transactions and successfully integrating the businesses. Additional risk factors are included in the Company’s Annual Report on Form 10-K. 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.
Black Box is the world’s largest technical services company dedicated to designing, building and maintaining today’s complicated data and voice infrastructure systems. Black Box services 175,000 clients in 141 countries with 168 offices throughout the world. To learn more, visit the Black Box website at www.blackbox.com.
Black Box and the Double Diamond logo are registered trademarks and DVH is a trademark of BB Technologies, Inc.
1000 Park Drive, Lawrence, PA 15055-1018 * (724) 746-5500 * Fax (724) 746-0746

 


 

Page 6
BLACK BOX CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
                                 
    Three months ended     Year ended  
    March 31,     March 31,     March 31,     March 31,  
In thousands, except per share   2006     2005     2006     2005  
         
Revenue:
                               
Hotline products
  $ 53,667     $ 55,510     $ 213,946     $ 227,601  
On-Site services
    121,201       101,720       507,389       307,475  
 
                       
Total
  174,868     157,230     721,335     535,076  
 
                               
Cost of sales:
                               
Hotline products
  29,209     26,785     108,220     108,281  
On-Site services
    81,533       70,729       330,765       211,866  
 
                       
Total
  110,742     97,514     438,985     320,147  
 
                       
 
                               
Gross profit
    64,126       59,716       282,350       214,929  
 
                               
Selling, general & administrative expense
    53,858       52,119       205,866       160,002  
 
                               
Restructuring and other charges
          5,059       5,290       5,059  
 
                               
Intangibles amortization
    764       1,145       4,999       1,332  
 
                       
 
                               
Operating income
    9,504       1,393       66,195       48,536  
 
                               
Interest expense, net
    2,437       1,319       9,123       2,755  
 
                               
Other expenses, net
    (43 )     22       36       115  
 
                       
 
                               
Income before income taxes
    7,110       52       57,036       45,666  
 
                               
Provision for income taxes
    2,454       18       19,678       15,754  
 
                       
 
                               
Net income
  $ 4,656     $ 34     $ 37,358     $ 29,912  
 
                       
 
                               
Basic earnings per common share
  $ 0.26     $ 0.00     $ 2.18     $ 1.72  
 
                       
 
                               
Diluted earnings per common share
  $ 0.26     $ 0.00     $ 2.13     $ 1.68  
 
                       
 
                               
Weighted average common shares
    17,617       17,148       17,164       17,411  
 
                       
 
                               
Weighted average common & common equivalent shares outstanding
    18,247       17,524       17,544       17,845  
 
                       
1000 Park Drive, Lawrence, PA 15055-1018 * (724) 746-5500 * Fax (724) 746-0746

 


 

Page 7
BLACK BOX CORPORATION
CONSOLIDATED BALANCE SHEETS
                 
    March 31,     March 31,  
In thousands   2006     2005  
     
Assets
               
Cash and cash equivalents
  $ 11,207     $ 11,592  
Accounts receivable, net
    116,713       116,865  
Lease receivables
    512       1,697  
Inventories, net
    53,926       57,176  
Costs and estimated earnings in excess of billings on uncompleted contracts
    23,803       25,695  
Deferred tax asset
    8,973       9,236  
Net current assets of discontinued operations
    467       549  
Other current assets
    15,523       14,724  
 
           
Total current assets
    231,124       237,534  
 
           
Property, plant and equipment, net
    35,124       38,268  
Goodwill, net
    468,724       444,567  
Intangibles, net
    55,440       44,157  
Lease receivables, net of current portion
          473  
Deferred tax asset
    4,231       3,793  
Discontinued operations, net of current portion
          373  
Other assets
    5,091       3,725  
 
           
Total assets
  $ 799,734     $ 772,890  
 
           
Liabilities
               
Current maturities of long-term debt
  $ 1,049     $ 692  
Current maturities of discounted lease rentals
    30       890  
Accounts payable
    44,943       36,032  
Billings in excess of costs and estimated earnings on uncompleted contracts
    8,648       8,947  
Deferred revenue
    22,211       21,456  
Accrued liabilities:
               
Compensation and benefits
    13,954       14,270  
Restructuring
    3,292       6,709  
Other liabilities
    27,817       32,708  
Income taxes
    5,924       3,295  
 
           
Total current liabilities
    127,868       124,999  
 
           
Long-term debt
    122,673       147,196  
Discounted lease rentals
          30  
Deferred taxes
           
Other liabilities
    887       75  
Restructuring reserve
    7,406       9,889  
Stockholders’ Equity
               
Common stock
    25       24  
Additional paid-in capital
    362,810       336,290  
Retained earnings
    461,853       428,632  
Treasury stock, at cost
    (296,824 )     (296,797 )
Accumulated other comprehensive gain
    13,036       22,552  
 
           
Total stockholders’ equity
    540,900       490,701  
 
           
Total liabilities and stockholders’ equity
  $ 799,734     $ 772,890  
 
           
1000 Park Drive, Lawrence, PA 15055-1018 * (724) 746-5500 * Fax (724) 746-0746

 


 

Page 8
BLACK BOX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 
    Three Months Ended   Year Ended
    March 31,   March 31,   March 31,   March 31,
In thousands   2006   2005   2006   2005
 
Operating Activities
                               
Net income
  $ 4,656     $ 34     $ 37,358     $ 29,912  
Adjustments to reconcile net income to cash
                               
Provided by operating activities:
                               
Intangibles amortization
    764       1,145       4,999       1,332  
Depreciation
    2,153       2,253       8,931       6,623  
Deferred tax provision / (benefit)
    1,871       (1,852 )     (212 )     (77 )
Stock compensation expense
                      680  
Tax benefit from exercised stock options
    147       (83 )     (3,200 )     (3,472 )
Changes in operating assets and liabilities:
                               
Accounts receivable, net
    9,296       7,725       9,369       8,878  
Inventories, net
    (673 )     2,336       5,000       (76 )
Other current assets
    6,271       2,419       7,541       3,307  
Proceeds from lease contracts
    (88 )     504       1,658       504  
Accounts payable and accrued liabilities
    (11,512 )     3,317       (19,647 )     4,595  
           
Net cash provided by operating activities
  $ 12,885     $ 17,798     $ 51,797     $ 52,206  
           
Investing Activities
                               
Capital expenditures, net
  $ (751 )   $ (470 )   $ (2,670 )   $ (2,319 )
Acquisition of businesses, net of cash acquired
          (102,553 )     (40,682 )     (102,553 )
Prior merger-related payments
          605       (378 )     107  
           
Net cash used in investing activities
  $ (751 )   $ (102,418 )   $ (43,730 )   $ (104,765 )
           
Financing Activities
                               
Proceeds/(repayments) on borrowings, net
  $ (18,689 )   $ 106,414     $ (26,107 )   $ 110,450  
Repayments on discounted lease rentals
    (43 )     (458 )     (890 )     (458 )
Proceeds from exercise of options
    6,976       609       23,320       7,919  
Payment of dividends
    (1,045 )     (1,038 )     (4,094 )     (3,847 )
Deferred financing costs
    (180 )     (1,117 )     (180 )     (1,352 )
Purchase of treasury stock
    (13 )     (19,327 )     (27 )     (56,912 )
           
Net cash provided/(used) in financing activities
  $ (12,994 )   $ 85,083     $ (7,978 )   $ 55,800  
Foreign currency exchange impact on cash
  (76 )   182     (474 )   (955 )
           
Increase/(decrease) in cash & cash equivalents
  $ (936 )   $ 645     $ (385 )   $ 2,286  
Cash & cash equivalents at beginning of period
    12,143       10,947       11,592       9,306  
           
Cash & cash equivalents at end of period
  $ 11,207     $ 11,592     $ 11,207     $ 11,592  
     
1000 Park Drive, Lawrence, PA 15055-1018 * (724) 746-5500 * Fax (724) 746-0746

 


 

Page 9
Non-GAAP Measurements
The financial information presented in this release contains certain non-GAAP financial measures. Management uses the non-GAAP measures to improve comparisons between fiscal periods. Management believes the use of the non-GAAP measures improves the investor’s ability to make comparisons between fiscal periods and provide more useful information to investors regarding the Company’s financial condition and its results of operations. In accordance with SEC Regulation G, the following financial highlights tables reconcile (1) free cash flow; (2) cash provided by operating activities excluding restructuring payments and satisfaction of a litigation judgment; (3) net income excluding restructuring charges and reconciling items; and (4) diluted EPS excluding restructuring charges and reconciling items; to the most directly comparable U.S. GAAP measures. The additional non-GAAP financial information presented should be considered in conjunction with, and not as a substitute for, or superior to, the financial information presented in accordance with GAAP. All dollar amounts are in thousands.
Management believes that free cash flow, defined by the Company as cash provided by operating activities less net capital expenditures, plus proceeds from option exercises, plus or minus foreign currency translation adjustments, is an important measurement of liquidity as it represents the total cash available to the Company. A reconciliation of cash provided by operating activities to free cash flow is presented below:
                                           
    4Q06   3Q06   4Q05     FY06   TY05
       
Cash provided by operating activities
  $ 12,885     $ 16,438     $ 17,798       $ 51,797     $ 52,206  
Capital expenditures
    (964 )     (1,551 )     (927 )       (4,115 )     (3,506 )
Capital disposals
    213       231       457         1,445       1,187  
Proceeds from stock option exercises
    6,976       8,892       609         23,320       7,919  
Foreign currency exchange impact on cash
    (76 )     (408 )     182         (474 )     (955 )
       
Free cash flow
  $ 19,034     $ 23,602     $ 18,119       $ 71,973     $ 56,851  
       
Management believes that presenting cash provided by operating activities exclusive of the cash flow impact from items that rarely occur or only occur once is a more meaningful measurement of cash provided by operating activities on an ongoing basis and allows the reader to more accurately compare other fiscal periods where the events did not occur. A reconciliation of cash provided by operating activities to cash provided by operating activities excluding restructuring payments and satisfaction of a litigation judgment is presented below:
1000 Park Drive, Lawrence, PA 15055-1018 * (724) 746-5500 * Fax (724) 746-0746

 


 

Page 10
                                           
    4Q06   3Q06   4Q05     FY06   FY05
       
Cash provided by operating activities
  $ 12,885     $ 16,438     $ 17,798       $ 51,797     $ 52,206  
Restructuring payments
    1,753       1,537       1,266         10,918       1,653  
Satisfaction of a litigation judgment
                        1,778        
       
Cash provided by operating activities excluding restructuring payments and satisfaction of a litigation judgment
  $ 14,638     $ 17,975     $ 19,064       $ 64,493     $ 53,859  
       
Management believes that presenting net income and diluted earnings per share excluding restructuring charges and reconciling items is useful to investors because it provides a more meaningful comparison of the ongoing operations of the Company. Included in reconciling items are acquisition-related expenses from the purchase of Norstan and the Italian Operations Adjustment in FY06 and acquisition-related expenses from the purchase of Norstan, settlement of a litigation matter and costs associated with the establishment and review of procedures to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 in FY05. A reconciliation of net income to net income excluding restructuring charges and reconciling items is presented below:
                                 
    4Q06   4Q05   FY06   FY05
         
Net income
  $ 4,656     $ 34     $ 37,358     $ 29,912  
% of revenues
    2.7 %     0.0 %     5.2 %     5.6 %
Restructuring charges, after tax impact
          3,314       3,465       3,314  
Reconciling Items, after tax impact
    4,931       3,471       8,431       4,650  
         
Net income excluding restructuring charges and reconciling items
  $ 9,587     $ 6,819     $ 49,254     $ 37,876  
% of revenues
    5.5 %     4.3 %     6.8 %     7.1 %
       
A reconciliation of diluted earnings per common share (EPS) to diluted EPS excluding restructuring charges and reconciling items is presented below:
                                 
    4Q06   4Q05   FY06   FY05
         
Diluted EPS
  $ 0.26     $ 0.00     $ 2.13     $ 1.68  
EPS impact of restructuring charges
          0.19       0.20       0.19  
EPS impact of reconciling items
    0.27       0.20       0.48       0.26  
         
Diluted EPS excluding restructuring charges and reconciling items
  $ 0.53     $ 0.39     $ 2.81     $ 2.13  
       
1000 Park Drive, Lawrence, PA 15055-1018 * (724) 746-5500 * Fax (724) 746-0746

 


 

Page 11
SUPPLEMENTAL INFORMATION:
Additionally, the following supplemental information is being provided for comparisons of fourth quarter ended March 31, 2006 reported results to this year’s third quarter and prior year’s fourth quarter. All dollar amounts are in thousands unless noted otherwise.
Information on revenues and operating income by geography is presented below. Management believes it is important to separately present the restructuring charges and reconciling items. Reconciling items consist of acquisition-related expenses from the purchase of Norstan and the Italian Operations Adjustment in the 2006 periods and acquisition-related expenses from the purchase of Norstan, settlement of a litigation matter and costs associated with the establishment and review of procedures to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 in the 2005 periods. Management believes this enables a clearer understanding of the ongoing operations of the Company and allows the reader to more accurately compare other fiscal periods where the events did not occur.
1000 Park Drive, Lawrence, PA 15055-1018 * (724) 746-5500 * Fax (724) 746-0746

 


 

Page 12
Information on revenues and operating income for geographical segments is presented below:
                                           
    4Q06   3Q06   4Q05     FY06   FY05
       
Revenues:
                                         
North America
  $ 137,912     $ 143,173     $ 112,047       $ 564,700     $ 355,013  
Europe
    27,152       29,950       35,501         120,051       142,838  
All Other
    9,804       9,012       9,682         36,584       37,225  
             
Total
  $ 174,868     $ 182,135     $ 157,230       $ 721,335     $ 535,076  
                                         
Operating income:
                                         
North America
  $ 9,414     $ 15,740     $ (295 )     $ 53,550     $ 26,798  
% of North America revenues
    6.8 %     11.0 %     (0.3 )%       9.5 %     7.5 %
Europe
  (1,643 )   4,101     274       5,518     13,639  
% of Europe revenues
    (6.1 )%     13.7 %     0.8 %       4.6 %     9.5 %
All Other
  1,733     1,771     1,414       7,127     8,099  
% of All Other revenues
    17.7 %     19.7 %     14.6 %       19.5 %     21.8 %
             
Total
  $ 9,504     $ 21,612     $ 1,393       $ 66,195     $ 48,536  
% of Total revenues
    5.4 %     11.9 %     0.9 %       9.2 %     9.1 %
                                         
Restructuring charges and reconciling items
                                         
North America
  $ 464     $ 1,245     $ 9,356       $ 7,358     $ 11,156  
Europe
    7,065             1,003         10,807       1,003  
All Other
                               
             
Total
  $ 7,529     $ 1,245     $ 10,359       $ 18,165     $ 12,159  
                                         
Operating income excluding restructuring charges and reconciling items
                                         
North America
  $ 9,878     $ 16,985     $ 9,061       $ 60,908     $ 37,954  
% of North America revenues
    7.2 %     11.9 %     8.1 %       10.8 %     10.7 %
Europe
  5,422     4,101     1,277       16,325     14,642  
% of Europe revenues
    20.0 %     13.7 %     3.6 %       13.6 %     10.3 %
All Other
  1,733     1,771     1,414       7,127     8,099  
% of All Other revenues
    17.7 %     19.7 %     14.6 %       19.5 %     21.8 %
             
Total
  $ 17,033     $ 22,857     $ 11,752       $ 84,360     $ 60,695  
% of Total revenues
    9.7 %     12.5 %     7.5 %       11.7 %     11.3 %
       
1000 Park Drive, Lawrence, PA 15055-1018 * (724) 746-5500 * Fax (724) 746-0746

 


 

Page 13
Information on revenues and gross profit for data services, voice services and hotline services is presented below:
                                           
    4Q06   3Q06   4Q05     FY06   FY05
       
Revenues:
                                         
Data Services
  $ 44,017     $ 47,083     $ 48,799       $ 196,585     $ 200,935  
Voice Services
    77,184       82,281       52,921         310,804       106,540  
Hotline Services
    53,667       52,771       55,510         213,946       227,601  
             
Total
  $ 174,868     $ 182,135     $ 157,230       $ 721,335     $ 535,076  
                                           
Gross Profit:
                                         
Data Services
  $ 11,268     $ 14,794     $ 13,343       $ 57,068     $ 59,354  
% of Data Services revenues
    25.6 %     31.4 %     27.3 %       29.0 %     29.5 %
Voice Services
  28,400     32,145     17,648       119,556     36,255  
% of Voice Services revenues
    36.8 %     39.1 %     33.3 %       38.5 %     34.0 %
Hotline Services
  24,458     26,463     28,725       105,726     119,320  
% of Hotline Services revenues
    45.6 %     50.1 %     51.7 %       49.4 %     52.4 %
             
Total
  $ 64,126     $ 73,402     $ 59,716       $ 282,350     $ 214,929  
% of Total revenues
    36.7 %     40.3 %     38.0 %       39.1 %     40.2 %
                                           
Reconciling items:
                                         
Data Services
  $ 2,071                   $ 2,071        
Voice Services
                               
Hotline Services
    1,517                     1,517        
             
Total
  $ 3,588                   $ 3,588        
                                           
Gross Profit including:
                                         
Data Services
  $ 13,339     $ 14,794     $ 13,343       $ 59,139     $ 59,354  
% of Data Services revenues
    30.3 %     31.4 %     27.3 %       30.1 %     29.5 %
Voice Services
  28,400     32,145     17,648       119,556     36,255  
% of Voice Services revenues
    36.8 %     39.1 %     33.3 %       38.5 %     34.0 %
Hotline Services
  25,975     26,463     28,725       107,243     119,320  
% of Hotline Services revenues
    48.4 %     50.1 %     51.7 %       50.1 %     52.4 %
             
Total
  $ 67,714     $ 73,402     $ 59,716       $ 285,938     $ 214,929  
% of Total revenues
    38.7 %     40.3 %     38.0 %       39.6 %     40.2 %
       
1000 Park Drive, Lawrence, PA 15055-1018 * (724) 746-5500 * Fax (724) 746-0746

 


 

Page 14
Information on revenues on a same-office basis is presented below:
                         
    4Q06   4Q05   Change
 
Revenues as reported
  $ 174,868     $ 157,230       11 %
Less revenues from offices added since Fiscal 2005
    (58,440 )     (35,208 )        
     
Revenues on same-office basis
  $ 116,428     $ 122,022       (5 )%
 
Information on various balance sheet ratios, backlog and headcount is presented below. Dollar amounts are in millions.
                         
    4Q06   3Q06   4Q05
 
Accounts Receivable:
                       
Gross Accounts Receivable $
  $ 126.2     $ 133.9     $ 124.2  
 
Reserve $ / %
  $ 9.5/7.5 %   $ 8.3/6.2 %   $ 7.3/5.9 %
Net Accounts Receivable $
  $ 116.7     $ 125.6     $ 116.9  
 
Net Days Sales Outstanding
  54 days     57 days     57 days  
 
Inventory:
                       
Gross Inventory $
  $ 68.2     $ 66.9     $ 69.7  
Reserve $ / %
  $ 14.3/21.0 %   $ 13.5/20.2 %   $ 12.5/17.9 %
Net Inventory $
  $ 53.9     $ 53.4     $ 57.2  
 
Net Inventory Turns
    7.3 x     6.8 x     6.4 x  
 
Six-Month Order Backlog
  $ 96     $ 94     $ 97  
 
Team Members
    3,295       3,273       3,371  
 
1000 Park Drive, Lawrence, PA 15055-1018 * (724) 746-5500 * Fax (724) 746-0746