EX-99 3 a4438322_ex991.txt BLACK BOX EXHIBIT 99.1 Exhibit 99.1 Black Box Corporation Reports First Quarter Fiscal 2004 Results PITTSBURGH, Pa.--(BUSINESS WIRE)--July 22, 2003--Black Box Corporation (Nasdaq:BBOX) today reported for the first quarter ended June 29, 2003, diluted earnings per share of 60 cents compared to 70 cents last year, down 14%. Corresponding reported net income for the quarter was $11.5 million or 9.0% of revenues, compared to $14.7 million or 9.5% of revenues last year. Total revenues for the quarter were $128 million, down 17% from $154 million last year. North American revenues were $86 million, down 20% from last year's $108 million. European revenues were $34 million, down 7% from last year's $36 million. All Other revenues were $8 million, down 20% from last year's $10 million. First quarter cash provided by operating activities was $14 million or 123% of net income, compared to $19 million or 132% of net income last year. Free cash flow was $16 million compared to $24 million last year. The first quarter's free cash flow of $16 million was used towards: Black Box stock repurchases of $14 million; dividend payments of $1 million; and merger activity of $1 million. The Company also used $5 million of cash on hand for additional stock repurchases during the quarter. 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 for stock repurchases, mergers, dividend payments or debt reduction. In accordance with SEC Regulation G, the attached financial charts include reconciliations of non-GAAP financial measures in this release to the most directly comparable GAAP measure. Commenting on the first quarter results, Mr. Young, said, "Although revenues were down, Black Box remains operationally and financially strong. This is a direct result of our commitment and demonstrated ability to properly size our cost structure. At the current level of revenues we are pleased with our overall operating performance, and particularly, with net income at 9% of revenues and operating cash flow of $14 million, or 123% of net income. In addition, we continue to fund our strategic growth initiatives." Mr. Young went on to say, "These strategic growth initiatives are focused both on increasing market share in existing markets and developing new markets. Specific examples would include our innovative One Source for Worldwide Infrastructure Program and our recently announced In-Home Networking Partnership Program. Although the world economy remains challenging, Black Box remains well positioned for future long-term profitable growth." The Company will conduct a conference call beginning at 10:45 a.m. Eastern Time today, July 22, 2003. Fred Young, Chief Executive Officer, will host the call. To participate in the call, please dial (612) 326-1011 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 690382. This release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected, including levels of business activity and global economic conditions. Any information, which is not historical in nature, constitutes such forward-looking statements and speaks only as of the date of this release. Black Box is the world's largest technical services company dedicated to designing, building and maintaining today's complicated network infrastructure systems. Black Box services 150,000 clients in 132 countries with 117 offices throughout the world. BLACK BOX CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Quarter Ended -------------------- June 29, June 30, 2003 2002 ---------- --------- Revenues $128,347 $154,412 Cost of sales 74,900 92,520 ---------- --------- Gross profit 53,447 61,892 Selling, general and administrative expenses 34,985 37,704 Intangibles amortization 89 101 ---------- --------- Operating income 18,373 24,087 Interest expense, net 420 772 Other (income)/expenses, net (9) 37 ---------- --------- Income before income taxes 17,962 23,278 Provision for income taxes 6,466 8,613 ---------- --------- Net income $11,496 $14,665 ========== ========= Basic earnings per common share $0.62 $0.72 Diluted earnings per common share $0.60 $0.70 Weighted average common shares 18,617 20,266 Weighted average common and common equivalent shares outstanding 19,062 21,023 BLACK BOX CORPORATION CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (Unaudited) (Audited) June 29, March 31, ASSETS 2003 2003 ----------- --------- Current assets: Cash and cash equivalents $9,227 $14,043 Trade accounts receivable, net 96,362 100,263 Inventories, net 40,436 40,047 Costs and estimated earnings in excess of billings on uncompleted contracts 14,520 18,261 Other current assets 15,053 16,052 ----------- --------- Total current assets 175,598 188,666 Property, plant and equipment, net 33,536 34,737 Intangibles, net 402,732 399,299 Other assets 3,705 4,027 ----------- --------- Total assets $615,571 $626,729 =========== ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current debt $443 $926 Accounts payable 22,876 30,508 Billings in excess of costs and estimated earnings on uncompleted contracts 2,816 3,295 Accrued expenses 26,623 32,547 Accrued taxes 4,587 2,940 ----------- --------- Total current liabilities 57,345 70,216 ----------- --------- Long-term debt 50,023 49,453 Other liabilities 12,419 12,638 Stockholders' equity: Common stock 23 23 Additional paid-in capital 295,524 295,271 Retained earnings 369,629 359,037 Treasury stock, at cost (178,106) (163,547) Accumulated other comprehensive gain 8,714 3,638 ----------- --------- Total stockholders' equity 495,784 494,422 ----------- --------- Total liabilities and stockholders' equity $615,571 $626,729 =========== ========= BLACK BOX CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Quarter Ended June 29, June 30, 2003 2002 --------- -------- Cash flows from operating activities: Net income $11,496 $14,665 Adjustments to reconcile net income to cash provided by operating activities: Intangibles amortization 89 101 Depreciation 1,675 1,942 Changes in working capital items: Account receivable, net 3,901 5,720 Inventories, net (389) 188 Other current assets 4,780 (1,136) Accounts payable and accrued liabilities (7,409) (2,066) --------- -------- Cash provided by operating activities 14,143 19,414 --------- -------- Cash flows from investing activities: Capital expenditures, net of disposals 25 (273) Merger transactions, net of cash acquired (784) (2,749) --------- -------- Cash used in investing activities (759) (3,022) --------- -------- Cash flows from financing activities: Revolving credit borrowings, net 87 (15,193) Proceeds from exercise of options 246 1,436 Payment of dividends (904) - Purchase of treasury stock (19,278) (3,694) --------- -------- Cash used in financing activities (19,849) (17,451) --------- -------- Foreign currency translation adjustment 1,649 3,076 --------- -------- (Decrease)/ increase in cash and cash equivalents (4,816) 2,017 Cash and cash equivalents at beginning of period 14,043 13,423 --------- -------- Cash and cash equivalents at end of period $9,227 $15,440 ========= ======== Interest paid $362 $796 Income taxes paid $5,083 $6,044 RECONCILIATIONS: In addition to reported results under U.S. GAAP for the fiscal periods, the following financial highlights table also include, where appropriate, a reconciliation of free cash flow (which is a non-GAAP measure), to the most directly comparable GAAP measures. All dollar amounts are in thousands except per share amounts. A reconciliation of cash provided by operating activities to free cash flow is presented below: 1Q04 1Q03 ---------------------------------------------------------------------- Cash provided by operating activities $14,143 $19,414 Plus or (minus): Net capital disposals/expenditures 25 (273) Foreign currency translation adjustment 1,649 3,076 Proceeds from stock option exercises 246 1,436 ---------------------------------------------------------------------- Free cash flow $16,063 $23,653 ---------------------------------------------------------------------- SUPPLEMENTAL INFORMATION: Additionally, the following supplemental information is being provided for comparisons of first quarter ended June 29, 2003 reported results to first quarter prior year. A reconciliation of results excluding special items (which is a non-GAAP measure) to the GAAP measure is presented where appropriate. All dollar amounts are in thousands. Information on revenues and operating income by geography is presented below: 1Q04 4Q03 1Q03 ---------------------------------------------------------------------- Revenues: North America $86,417 $87,132 $107,969 Europe 33,598 37,630 36,018 All Other 8,332 10,050 10,425 --------------------------- Total $128,347 $134,812 $154,412 Operating Income: North America $11,889 $5,056 $16,085 % of North America revenues 13.8% 5.8% 14.9% Europe $4,602 $116 $5,633 % of Europe revenues 13.7% 0.3% 15.6% All Other $1,882 $2,136 $2,369 % of All Other revenues 22.6% 21.3% 22.7% --------------------------- Total $18,373 $7,308 $24,087 % of total revenues 14.3% 5.4% 15.6% Special Items: North America $-- $5,625 $-- Europe -- 4,592 -- All Other -- 154 -- --------------------------- Total $-- $10,371 $-- Operating Income excluding special items: North America $11,889 $10,681 $16,085 % of North America revenues 13.8% 12.3% 14.9% Europe $4,602 $4,708 $5,633 % of Europe revenues 13.7% 12.5% 15.6% All Other $1,882 $2,290 $2,369 % of All Other revenues 22.6% 22.9% 22.7% --------------------------- Total $18,373 $17,679 $24,087 % of total revenues 14.3% 13.1% 15.6% ---------------------------------------------------------------------- Information on revenues and gross profit for hotline services, structured cabling services and telephony services is presented below: 1Q04 4Q03 1Q03 ---------------------------------------------------------------------- Revenues: Hotline Services $55,976 $61,330 $63,554 Structured Cabling Services 54,600 56,695 73,134 Telephony Services 17,771 16,787 17,724 --------------------------- Total $128,347 $134,812 $154,412 Gross Profit: Hotline Services $29,109 $31,729 $31,662 % of Hotline Services revenues 52.0% 51.7% 49.8% Structured Cabling Services $18,134 $15,005 $24,543 % of Structured Cabling Services revenues 33.2% 26.5% 33.6% Telephony Services $6,204 $6,202 $5,687 % of Telephony Services revenues 34.9% 36.9% 32.1% --------------------------- Total $53,447 $52,936 $61,892 % of total revenues 41.6% 39.3% 40.1% ---------------------------------------------------------------------- Information on revenues on a same-office basis is presented below: 1Q04 1Q03 Change ---------------------------------------------------------------------- Revenues as reported $128,347 $154,412 (17)% Less revenues from offices added since Fiscal 2003 (1,975) (219) n/a ---------------------------------------------------------------------- Revenues on same-office basis $126,372 $154,193 (18)% ---------------------------------------------------------------------- Information on various balance sheet ratios, backlog and headcount is presented below: ($ in millions) 1Q04 4Q03 1Q03 ---------------------------------------------------------------------- Accounts Receivable: Gross Accounts Receivable $ $108.0 $112.0 $119.3 Reserve $ / % $11.7/10.8% $11.7/10.5% $8.1/6.8% ---- ---- --- Net Accounts Receivable $ $96.3 $100.3 $111.2 Net Days Sales Outstanding 63 days 63 days 59 days Inventory: Gross Inventory $ $44.4 $44.0 $49.7 Reserve $ / % $4.0/9.0% $4.0/9.0% $3.7/7.4% --- --- --- Net Inventory $ $40.4 $40.0 $46.0 Net Inventory Turns 7x 8x 8x Six-Month Order Backlog $58 $51 $54 Team Members 3,009 3,123 3,675 ---------------------------------------------------------------------- CONTACT: Black Box Corporation Anna M. Baird, 724-873-6750 724-873-6799 (fax) Email: investors@blackbox.com