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Black Box Corporation (BBOX)
F4Q10 Earnings Call
May 131, 2010 5:00 pm ET
Gary Doyle – Director Investor Relations
R. Terry Blakemore – President, Chief Executive Officer & Director
Michael McAndrew – Chief Financial Officer, Vice President, Principal Accounting Officer, Treasurer & Secretary
Jeffery Beach – Stifel Nicolaus & Company, Inc.
Gregory Burns – Sidoti & Company, Inc.
Nat Kellogg – Hudson Securities
Previous Statements by BBOX
» Black Box Corp. F3Q10 (Qtr. End 12/26/09) Earnings Call Transcript
» Black Box Corporation F2Q10 (Qtr End 10/27/09) Earnings Call Transcript
» Black Box Corporation F3Q 2009 (Qtr End 12/27/08) Earnings Call Transcript
Welcome to Black Box Corporation’s fourth quarter of fiscal 2010 earnings conference call. My name is Gary Doyle and I am the Director of Investor Relations for Black Box. With us today are Terry Blakemore, President and CEO of Black Box Corporation and Mike McAndrew, our Vice President and Chief Financial Officer. Earlier today we announced our fourth quarter fiscal 2010 results by issuing a press release furnishing it to the Securities & Exchange Commission on Form 8K. We also posted this press release on our website at www.BlackBox.com.
We will start today’s call with an overview of our results from Terry Blakemore followed by a more detailed discussion by Mike and Terry. Following this we will field questions as time allows. Before we begin and as a reminder, matters discussed in this call may contain forward-looking statements that involve risks and uncertainties concerning Black Box’s expected financial performance. Actual results may differ materially from expected results and reported results should not be considered as an indication of future performance.
Potential factors that could affect our business and financial results include changes in economic conditions in our end markets and the general market at large. Additional factors are included in our most recent Form 10K, Form 10Q and today’s press release. On this call and as presented in today’s press release we will discuss some financial information that includes non-GAAP financial measures including operating net income, operating earnings per share, free cash flow, EBTIDA, adjusted EBITDA and organic or same office revenue comparisons. We will limit any non-GAAP financial discussions today to the specific measures in our press release.
As I said earlier, our press release was filed with the SEC and posted to our website prior to this call. Please refer to the schedules that accompany the press release for a reconciliation of non-GAAP financial measurements to the most directly comparable GAAP financial measurements and other supplemental information. Coming up on the IR calendar we will present at the UBS Global Technology and Services Conference in New York City on June 10th.
Now, I’d like to turn the call over to Mr. Terry Blakemore.
R. Terry Blakemore
I am pleased to report that our results for the fourth quarter and fiscal year 2010 show that despite a challenging economy and changes in our industry, the Black Box team delivered solid financial results and continue to provide the highest level of technical service and support to our clients worldwide. Revenues for the fourth quarter were $241 million equivalent with last year’s $241 million and a 5% decrease over last quarter’s $253 million. Fiscal 2010 revenues were $961 million, 4% decrease from last year’s $1 billion.
Our fourth quarter operating earnings per share were $0.78 down $0.14 from last year’s $0.92 and up $0.01 from last quarter’s $0.77. Fiscal 2010 operating earnings per share were $2.99 compared to $3.39 for the same period last year. Included in our fourth quarter and fiscal 2010 results is a $0.04 benefit from a reduction in our effective tax rate. Mike will discuss this in more detail later in the call.
Fourth quarter free cash flow was $18 million compared to $19 million last year. Free cash flow for fiscal 2010 was $59 million compared to $58 million for the same period last year. Free cash flow for the quarter was used to fund debt reduction and to pay dividends. I’ll turn it over to Mike now for a more detailed discussion on our financial results.
As Terry just mentioned we posted quarterly revenues of $241 million, equivalent to $241 million for the same period last year. Excluding $42 million of incremental revenue contribution in the fourth quarter related to acquisitions over the last two years and a $3 million positive impact of foreign currency, same office revenues for the fourth quarter were down $15 million or 7% in the same quarter last year.
On a sequential basis, revenue was down $13 million from $253 million in the third quarter of fiscal ’10. Excluding $7 million related to acquisitions last quarter and a $1 million negative impact from foreign currency, same office revenues are down 6% sequentially. You’ll recall that last quarter’s revenue included approximately $11 million in revenue along with the related costs for a current project with the federal government client. Normalizing for the effect of this $11 million in revenue last quarter, sequential revenues are down slightly.
Fiscal 2010 total revenues are $961 million which is down $39 million from last year’s $1 billion. Excluding $162 million of revenue contribution in fiscal ’10 related to acquisitions and a $1 million negative impact from foreign currency, same office revenues for fiscal ’10 are down $123 million or 13% from the prior year. We believe the decrease in same office revenues on a year-to-year basis is attributable to caution from our commercial clients related to both capital investments and IT spending. We also believe that the results in the current quarter reflect stabilization in our end markets.