Black Box Corporation F1Q11 (Qtr End 7/3/10) Earnings Call Transcript

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Black Box Corporation (BBOX)

F1Q11 (Qtr End 7/3/10) Earnings Call

August 3, 2010 5:10 pm ET

Executives

Gary Doyle - Director of Investor Relations

Terry Blakemore - President and Chief Executive Officer

Michael McAndrew - Vice President and Chief Financial Officer

Analysts

Jeff Beach - Stifel Nicolaus

Greg Burns - Sidoti and Company

Scott Blumenthal - Emerald Advisors

Presentation

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the First Quarter Fiscal 2011 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. The instructions will be given at that time. (Operator instructions). As a reminder the conference call is being recorded. I'll now turn the meeting over to our host, Mr. Gary Doyle, Director of Investor Relations. Please go ahead.

Gary Doyle

Thank you. Good evening and welcome to Black Box Corporation's first quarter of fiscal 2011 earnings conference call. My name is Gary Doyle and I'm 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 Executive Vice President and Chief Financial Officer.

Earlier today, we announced our first quarter fiscal 2011 results by issuing a press release and furnishing it to the Securities and Exchange Commission on Form 8-K. We also posted this press release on our website at blackbox.com.

We will start today's call with an overview of our results from Terry Blakemore followed by a more detailed discussion from 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 10-K 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, EBITDA, adjusted EBITDA and organic or same-store 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 measurement and other supplemental information.

Coming up on the IR calendar, we will present at the Morgan Kegan Technology and Services Conference in New York City on August 11 and the Credit Suisse Defense and Aerospace Boston conference on August 12th.

Now, I'd like to turn the call over to Mr. Terry Blakemore.

Terry Blakemore

Thanks, Gary. I am pleased to report strong results for the first quarter of our fiscal 2011 including our 9% year-over-year organic revenue growth. The Black Box commitment to provide our clients with world class technical solutions has position us to benefit as those client continue to increase their investment in their communications infrastructure.

Revenues for the first quarter were $264 million, which is a 12% increase over last year's $335 million and 9% increase over last quarter's $241 million. This is our highest quarterly revenue since the third quarter of our fiscal year 2007. Our first quarter operating earnings per share were $0.84, up $0.13 from last year's $0.71, and up $0.06 from last quarter's $0.78. First quarter free cash flow was $0.2 million compared to $16 million last year.

I'll turn it over to Mike now for a more detailed discussion of our financial results.

Michael McAndrew

Thanks Terry. As Terry just mentioned, we posted quarterly revenues of $264 million, an increase $29 million over the $235 million reported for the same period last year. I'd like to note that our fiscal first fiscal quarter this year contained four more business days than our first fiscal quarter last year. Including $8 million of incremental revenue contribution in the first quarter related to acquisitions over the last two years and a $0.2 million positive impact from foreign currency, same-office revenues for the first quarter were up $20 million or representing 9% representing 9% organic growth over the same quarter last year. Normalizing for the number of business days in the fiscal quarter, organic growth was 3% year-over-year.

On a sequential basis revenue was up $23 million from $241 million in the fourth quarter of fiscal '10 and excluding a $2 million negative impact from foreign currency same-office revenues were up 10% sequentially. We view the results in the current quarter reflect a macro improvement in our end markets, specifically an increase in capital investment in IT infrastructure.

Looking more deeply on our revenue by the two segments that we report the highlights are as follows. Initially from the service type segment perspective, our first quarter revenues were comprised of 62% of Voice Services, 20% of Data Services and 18% of Hotline products. Secondly, from a geographic segment perspective, our first quarter revenues were made up of 87% from North America, 10% from Europe and 3% from what we call, all other, which is primarily the Pac Rim and Latin America.

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