Black Box Corporation Reports Third Quarter of Fiscal 2016 Results

PITTSBURGH--()--Black Box Corporation (NASDAQ:BBOX), a leading technology solutions provider dedicated to helping customers design, build, manage and secure their IT infrastructure, today reported results for the third quarter of Fiscal 2016 and nine-month period ended December 26, 2015.

3Q16 Results

  • Revenues were $222.5 million, down 12% from $253.3 million for the same period last year and down 6% from $236.8 million in the sequential period.
  • Provision for income taxes was $0.1 million (1.1% effective rate), down 98% from $2.4 million (31.7% effective rate) for the same period last year and compared to a benefit for income taxes of $21.5 million (14.2% effective rate) in the sequential period.
  • Net income was $5.7 million, up 9% from $5.3 million for the same period last year and compared to a net loss of $129.8 million in the sequential period.
  • Diluted earnings per share was $0.37, up 9% from $0.34 for the same period last year and compared to diluted loss per share of $8.45 in the sequential period.
  • Operating net income* was $5.7 million, down 15% from $6.7 million for the same period last year and consistent with $5.7 million in the sequential period.
  • Operating EPS* was $0.37, down 15% from $0.44 for the same period last year and consistent with $0.37 in the sequential period.
  • Cash flow provided by operations was $28.8 million, up from $0.4 million for the same period last year and compared to cash flow used for operations of $6.5 million in the sequential period.
  • We provided $1.7 million to our shareholders by paying dividends.

3QYTD16 Results

  • Revenues were $688.5 million, down 8% from $747.4 million for the same period last year.
  • Benefit from income taxes was $19.4 million (13.6% effective rate), compared to provision for income taxes of $8.6 million (41.0% effective rate) for the same period last year.
  • Net loss was $123.4 million, which included $157.3 million ($133.4 million net of tax) of goodwill impairment loss, compared to net income of $12.4 million for the same period last year.
  • Diluted loss per share was $8.04, compared to diluted earnings per share of $0.80 for the same period last year.
  • Operating net income* was $14.9 million, down 21% from $18.8 million for the same period last year.
  • Operating EPS* was $0.97, down 20% from $1.21 for the same period last year.
  • Cash flow provided by operations was $14.9 million, up 56% from $9.5 million for the same period last year.
  • We provided $6.9 million to our shareholders by repurchasing $2.0 million of common stock and paying $4.9 million in dividends.

* See the information under the caption "Non-GAAP Financial Measures" below for a discussion regarding the usefulness of the non-GAAP financial measures contained in this release, definitions of those non-GAAP financial measures and reconciliations to their most directly comparable GAAP financial measures.

Commenting on the third quarter of Fiscal 2016 results, Michael McAndrew, President and Chief Executive Officer, said, "As a result of a favorable product mix that yielded a higher than anticipated gross profit margin combined with our previously-announced cost-containment efforts, I am pleased we achieved our profit guidance for the third quarter of Fiscal 2016 despite lower revenues relative to our guidance."

"Our Federal business performed as expected during the quarter but continues to face challenges related to lower government spending. Our Products business continues to perform and is on track to show modest organic growth in Fiscal 2016. Unfortunately, bookings levels in our Commercial Services business fell short of expectations resulting in a revenue shortfall along with reduction of our backlog. The programs and investments made in our Commercial Services sales team have yet to capitalize on our assets, including our strong client base, diverse technology skillset and broad geographic reach. Improved sales execution and cost management will continue to be our top priorities for the near term."

Guidance

For the fourth quarter of Fiscal 2016, the Company is targeting:

  • Revenues in the range of $217 million to $222 million.
  • Operating earnings per share in the range of $0.25 to $0.30.

Included at the mid-point of the fourth quarter of Fiscal 2016 target is a negative impact to Revenues of $1 million and Operating earnings per share of $0.01, related to the projected impact of foreign currencies relative to the US dollar compared to the prior year period.

For Fiscal 2016, the Company is targeting:

  • Revenues in the range of $905 million to $910 million.
  • Operating earnings per share in the range of $1.21 to $1.26.

Included at the mid-point of the Fiscal 2016 target is a negative impact to Revenues of $15 million and Operating earnings per share of $0.07, related to the projected impact of foreign currencies relative to the US dollar compared to the prior year period.

Included in these targets is an effective tax rate of 38.5%.These targets exclude intangible amortization, restructuring expenses and the impact of changes in the fair market value of the Company’s interest-rate swap.

Earnings Conference Call

The Company will conduct a conference call beginning at 5:00 p.m. Eastern Time today, January 26, 2016. Michael McAndrew, President and Chief Executive Officer, will host the call. To listen only to the live webcast, access the event at http://investor.blackbox.com/events.cfm. To participate in the teleconference, dial 877-303-3145 (USA) or 253-237-1194 (International) approximately 15 minutes prior to the starting time and ask to be connected to conference 16319514. A replay of the audio webcast will be available at http://investor.blackbox.com/events.cfm for a limited period of time.

About Black Box

Black Box is a leading technology solutions provider dedicated to helping customers design, build, manage and secure their IT infrastructure. Black Box delivers high-value products and services through its global presence and 3,637 team members. To learn more, visit the Black Box Web site at http://www.blackbox.com.

Black Box® and the Double Diamond logo are registered trademarks of BB Technologies, Inc.

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 and speak only as of the date of this release. You can identify these forward-looking statements by the fact that 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 and business conditions, successful integration of acquisitions, the timing and costs of restructuring programs and other initiatives, successful marketing of the Company's product and services offerings, successful implementation of the Company's integration initiatives, successful implementation of the Company's government contracting programs, competition, changes in foreign, political and economic conditions, fluctuating foreign currencies compared to the U.S. dollar, rapid changes in technologies, client preferences, the Company's arrangements with suppliers of voice equipment and technology, government budgetary constraints and various other matters, many of which are beyond the Company's control. Additional risk factors are included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2015. We can give no assurance that any goal, plan or target set forth in forward-looking statements will 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 and caution you not to unduly rely on any such forward-looking statements.

       
BLACK BOX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
 
In millions and may not foot due to rounding     December 26, 2015     March 31, 2015
Assets
Cash and cash equivalents $ 18.0 $ 23.5
Accounts receivable, net 160.7 150.6
Inventories, net 48.5 54.4
Costs/estimated earnings in excess of billings on uncompleted contracts 66.3 79.3
Other assets 28.1       35.5  
Total current assets 321.7 343.3
Property, plant and equipment, net 34.3 32.2
Goodwill, net 34.4 191.2
Intangibles, net 80.3 88.1
Deferred tax asset 49.9 27.0
Other assets 7.9       4.4  
Total assets $ 528.4       $ 686.3  
Liabilities
Accounts payable $ 57.1 $ 64.5
Accrued compensation and benefits 18.4 24.8
Deferred revenue 27.5 34.9
Billings in excess of costs/estimated earnings on uncompleted contracts 24.4 16.4
Other liabilities 40.2       47.1  
Total current liabilities 167.6 187.7
Long-term debt 128.7 137.3
Other liabilities 23.1       24.2  
Total liabilities $ 319.4 $ 349.1
Stockholders’ equity
Common stock $ $
Additional paid-in capital 501.0 498.1
Retained earnings 130.0 258.4
Accumulated other comprehensive income (loss) (13.2 ) (13.4 )
Treasury stock, at cost (408.8 )     (406.0 )
Total stockholders’ equity $ 209.0       $ 337.1  
Total liabilities and stockholders’ equity $ 528.4       $ 686.3  
                     
                   
BLACK BOX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
In millions, except per share amounts and may not foot due to rounding     3Q16     2Q16     3Q15     3QYTD16     3QYTD15
Revenues
Products $ 41.9 $ 44.3 $ 46.6 $ 126.7 $ 134.4
Services 180.5       192.6       206.7       561.8       613.0
Total 222.5 236.8 253.3 688.5 747.4
Cost of sales
Products 23.7 25.5 27.9 72.8 79.1
Services 129.2       139.9       148.6       405.0       442.5

Total

152.9 165.4 176.5 477.8 521.7
Gross profit 69.6 71.4 76.8 210.7 225.7
Selling, general & administrative expenses 60.0 61.4 65.1 184.2 193.2
Goodwill impairment loss 157.3 157.3
Intangibles amortization 2.6       2.6       2.6       7.8       7.9
Operating income (loss) 7.1 (149.9 ) 9.0 (138.6 ) 24.6
Interest expense, net 1.2 1.1 1.2 3.7 3.3
Other expenses (income), net 0.1       0.4       0.1       0.4       0.3
Income (loss) before provision for income taxes 5.8 (151.4 ) 7.7 (142.7 ) 21.0
Provision (benefit) for income taxes 0.1       (21.5 )     2.4       (19.4 )     8.6
Net income (loss) $ 5.7       $ (129.8 )     $ 5.3       $ (123.4 )     $ 12.4
Earnings (loss) per common share
Basic $ 0.37       $ (8.45 )     $ 0.34       $ (8.04 )     $ 0.80
Diluted $ 0.37       $ (8.45 )     $ 0.34       $ (8.04 )     $ 0.80
Weighted-average common shares outstanding
Basic 15.4       15.4       15.4       15.3       15.4
Diluted 15.4       15.4       15.5       15.3       15.5
Dividends per share     $ 0.11       $ 0.11       $ 0.10       $ 0.33       $ 0.30
 
                   
BLACK BOX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
In millions and may not foot due to rounding     3Q16     2Q16     3Q15     3QYTD16     3QYTD15
Operating Activities
Net income (loss) $ 5.7 $ (129.8 ) $ 5.3 $ (123.4 ) $ 12.4
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities
Intangibles amortization 2.6 2.6 2.6 7.8 7.9
Depreciation 2.2 2.1 1.7 6.3 5.1
Loss (gain) on sale of property (0.1 )
Deferred taxes (1.1 ) (25.9 ) (24.3 ) (0.1 )
Stock compensation expense 1.1 0.9 1.3 4.3 4.9
Change in fair value of interest-rate swaps (0.1 ) (0.3 ) (0.4 ) (0.8 )
Goodwill impairment loss 157.3 157.3
Changes in operating assets and liabilities (net of acquisitions)
Accounts receivable, net 3.9 (12.5 ) (14.2 ) (10.4 ) (24.1 )
Inventories, net 1.5 3.1 (4.0 ) 5.8 (3.4 )
Costs/estimated earnings in excess of billings on uncompleted contracts 12.6 2.4 5.1 13.0 5.8
All other assets (7.7 ) 4.4 (0.6 ) 3.7 2.1
Accounts payable (1.0 ) (6.8 ) 3.2 (7.3 ) 1.1
Billings in excess of costs/estimated earnings on uncompleted contracts 5.8 2.6 1.1 8.0 5.8
All other liabilities 3.1       (6.6 )     (0.9 )     (25.6 )     (7.1 )
Net cash provided by (used for) operating activities $ 28.8 $ (6.5 ) $ 0.4 $ 14.9 $ 9.5
Investing Activities
Capital expenditures $ (3.6 ) $ (2.6 ) $ (2.8 ) $ (8.1 ) $ (6.4 )
Capital disposals 0.1 0.1 0.1 0.2
Prior merger-related (payments)/recoveries                         (0.8 )
Net cash provided by (used for) investing activities $ (3.6 ) $ (2.5 ) $ (2.7 ) $ (8.0 ) $ (7.0 )
Financing Activities
Proceeds (repayments) from long-term debt $ (22.7 ) $ 7.0 $ 14.6 $ (8.8 ) $ 15.6
Proceeds (repayments) from short-term debt (3.2 ) 4.1 (3.9 ) 3.2 (1.7 )
Purchase of treasury stock (2.1 ) (2.8 ) (8.0 )
Payment of dividends (1.7 ) (1.7 ) (1.5 ) (4.9 ) (4.5 )
Increase (decrease) in cash overdrafts 0.1       (1.2 )     0.5       0.1       0.1  
Net cash provided by (used for) financing activities $ (27.6 ) $ 8.2 $ 7.6 $ (13.2 ) $ 1.5
Foreign currency exchange impact on cash $ 0.1       $ 0.6       $ (0.3 )     $ 0.8       $ (1.5 )
Increase/(decrease) in cash and cash equivalents $ (2.3 ) $ (0.2 ) $ 4.9 $ (5.5 ) $ 2.5
Cash and cash equivalents at beginning of period 20.3       20.5       28.4       23.5       30.8  
Cash and cash equivalents at end of period $ 18.0       $ 20.3       $ 33.3       $ 18.0       $ 33.3  
                                                   

Non-GAAP Financial Measures

As a supplement to United States Generally Accepted Accounting Principles ("GAAP"), the Company provides non-GAAP financial measures such as operating income before provision for income taxes ("EBIT"), operating net income, operating earnings per share ("EPS"), revenues excluding foreign currency, adjusted operating income, Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), Operating EBITDA and free cash flow to illustrate the Company's operational performance. These non-GAAP financial measures are not prepared in accordance with GAAP, are not reported by all of the Company's competitors and may not be directly comparable to similarly-titled measures of the Company's competitors due to potential differences in the exact method of calculation. However, each of the amounts included in the calculation of non-GAAP financial measures are computed in accordance with GAAP. See below for reconciliations to the most directly comparable GAAP financial measures.

Management uses these non-GAAP financial measures (a) to evaluate the Company's historical and prospective financial performance as well as its performance relative to its competitors, (b) to set internal sales targets and associated operating budgets, (c) to allocate resources and (d) to measure operational profitability. Management uses similar non-GAAP measures as an important factor in determining variable compensation for Management and its team members.

Non-GAAP financial measures are not in accordance with, or an alternative for, GAAP financial measures. The Company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.

Operating EBIT, operating net income and operating EPS

Management believes that operating EBIT, defined by the Company as net income (loss) plus provision (benefit) for income taxes and adjustments, operating net income, defined by the Company as operating EBIT less operational income taxes, and operating EPS, defined as operating net income divided by weighted average common shares outstanding (diluted), provide investors additional important information to enable them to assess, in the way Management assesses, the Company's current and future operations. Adjustments include intangibles amortization, the change in fair value of the interest-rate swaps, goodwill impairment loss, each of which are non-cash charges, and restructuring expense, which is a cash charge.

A reconciliation of Net income (loss) to operating EBIT and Operating net income is presented below:

         
In millions and may not foot due to rounding   3Q16   2Q16   3Q15   3QYTD16   3QYTD15
Net income (loss) $ 5.7 $ (129.8 ) $ 5.3 $ (123.4 ) $ 12.4
Provision (benefit) for income taxes 0.1 (21.5 ) 2.4 (19.4 ) 8.6
Effective tax rate 1.1 %   14.2 %   31.7 %   13.6 %   41.0 %
Income (loss) before provision for income taxes $ 5.8 $ (151.4 ) $ 7.7 $ (142.7 ) $ 21.0
 
Adjustments
Intangibles amortization $ 2.6 $ 2.6 $ 2.6 $ 7.8 $ 7.9
Change in fair value of interest-rate swaps (0.1 ) (0.3 ) (0.4 ) (0.8 )
Restructuring expense 0.9 0.9 1.0 2.3 2.7
Goodwill impairment loss     157.3         157.3      
Total pre-tax adjustments $ 3.5 $ 160.7 $ 3.3 $ 167.0 $ 9.8
 
Operating EBIT $ 9.3 $ 9.3 $ 11.0 $ 24.3 $ 30.9
Operational effective tax rate 38.5 % 38.5 % 39.0 % 38.5 % 39.0 %
Operational income taxes (1) 3.6     3.6     4.3     9.3     12.0  
Operating net income   $ 5.7     $ 5.7     $ 6.7     $ 14.9     $ 18.8  

(1) The effective tax rate used to determine operational income taxes is based on the Company's projected full-year ordinary income tax expense and the projected full-year impact of certain discreet tax items.

 

A reconciliation of Diluted earnings (loss) per share to operating EPS is presented below:

                   
      3Q16     2Q16     3Q15     3QYTD16     3QYTD15
Diluted EPS $ 0.37 $ (8.45 ) $ 0.34 $ (8.04 ) $ 0.80
EPS impact *       8.82       0.10       9.01       0.41
Operating EPS     $ 0.37       $ 0.37       $ 0.44       $ 0.97       $ 1.21

* EPS impact is the result of excluding the provision for income taxes and the adjustments and utilizing an operational effective tax rate.

 

Revenues excluding foreign currency

Management is presented with and reviews revenues which exclude foreign currency and enable an investor to assess, in the way Management assesses, revenues from its core operations.

Information on quarterly revenues excluding foreign currency compared to the same period last year is presented below:

           
In millions and may not foot due to rounding     3Q16     3Q15     % Change
Revenues $ 222.5 $ 253.3 (12 )%
Foreign currency impact - North America Products 0.2
Foreign currency impact - North America Services 0.6
Foreign currency impact - International Products 2.7
Foreign currency impact - International Services 0.7        
Revenues (excluding foreign currency)     $ 226.5       $ 253.3       (11 )%
 

Information on quarterly revenues excluding foreign currency compared to the sequential quarter is presented below:

           
In millions and may not foot due to rounding     3Q16     2Q16     % Change
Revenues $ 222.5 $ 236.8 (6 )%
Foreign currency impact - North America Products
Foreign currency impact - North America Services 0.1
Foreign currency impact - International Products 0.3
Foreign currency impact - International Services 0.1        
Revenues (excluding foreign currency)     $ 223.0       $ 236.8       (6 )%
 

Information on year-to-date revenues excluding foreign currency compared to the same period last year is presented below:

           
In millions and may not foot due to rounding     3QYTD16     3QYTD15     % Change
Revenues $ 688.5 $ 747.4 (8 )%
Foreign currency impact - North America Products 0.4
Foreign currency impact - North America Services 1.6
Foreign currency impact - International Products 9.5
Foreign currency impact - International Services 2.5        
Revenues (excluding foreign currency)     $ 702.6       $ 747.4       (6 )%
 

Segment Information

Management is presented with and reviews Revenues, Gross profit, Operating income (loss) and Adjusted operating income by segment. Management believes that Adjusted operating income, defined by the Company as Operating income (loss) plus adjustments, provides investors additional important information to enable them to assess, in the way Management assesses, the Company's current and future operations. Adjustments include intangibles amortization, goodwill impairment loss and restructuring expense.

A reconciliation of Operating income (loss) to Adjusted operating income (by segment) is presented below:

                   
3Q16     2Q16     3Q15     3QYTD16     3QYTD15
In millions and may not foot due to rounding     $     % of Rev     $     % of Rev     $     % of Rev     $     % of Rev     $     % of Rev
Revenues                    
North America Products $ 20.1 $ 24.3 $ 21.8 $ 65.3 $ 64.7
International Products 21.8   19.9   24.8   61.4   69.7  

Total Products

$ 41.9 $ 44.3 $ 46.6 $ 126.7 $ 134.4
North America Services $ 172.6 $ 185.5 $ 198.4 $ 540.1 $ 590.2
International Services 7.9   7.1   8.3   21.7   22.8  
Total Services $ 180.5   $ 192.6   $ 206.7   $ 561.8   $ 613.0  
Total $ 222.5 $ 236.8 $ 253.3 $ 688.5 $ 747.4
Gross profit
North America Products $ 9.1 45.2 % $ 10.9 44.8 % $ 8.7 39.8 % $ 28.9 44.2 % $ 26.3 40.7 %
International Products 9.2   42.0 % 7.9   39.6 % 10.0   40.3 % 25.0   40.7 % 28.9   41.5 %
Total Products $ 18.2 43.5 % $ 18.8 42.4 % $ 18.7 40.1 % $ 53.9 42.5 % $ 55.2 41.1 %
North America Services $ 49.6 28.7 % $ 51.0 27.5 % $ 55.8 28.1 % $ 151.7 28.1 % $ 164.5 27.9 %
International Services 1.8   22.4 % 1.6   22.5 % 2.3   27.6 % 5.1   23.4 % 6.0   26.3 %
Total Services $ 51.4   28.5 % $ 52.6   27.3 % $ 58.1   28.1 % $ 156.8   27.9 % $ 170.5   27.8 %
Total $ 69.6 31.3 % $ 71.4 30.1 % $ 76.8 30.3 % $ 210.7 30.6 % $ 225.7 30.2 %
Operating income (loss)
North America Products $ 0.7 3.6 % $ (22.9 ) n/m $ 0.7 3.2 % $ (21.2 ) n/m $ 2.8 4.3 %
International Products 2.0   9.0 % (5.1 ) n/m 0.6   2.4 % (2.8 ) n/m 0.6   0.9 %
Total Products $ 2.7 6.4 % $ (28.0 ) n/m $ 1.3 2.8 % $ (24.0 ) n/m $ 3.4 2.5 %
North America Services $ 3.9 2.3 % $ (114.9 ) n/m $ 6.9 3.5 % $ (108.7 ) n/m $ 19.8 3.4 %
International Services 0.5   6.2 % (6.9 ) n/m 0.8   9.7 % (5.9 ) n/m 1.4   6.2 %
Total Services $ 4.4   2.4 % $ (121.9 ) n/m $ 7.7   3.7 % $ (114.6 ) n/m $ 21.2   3.5 %
Total $ 7.1 3.2 % $ (149.9 ) n/m $ 9.0 3.6 % $ (138.6 ) n/m $ 24.6 3.3 %
Adjustments
North America Products $ 0.1 $ 25.2 $ $ 25.3 $ 0.1
International Products   5.8   0.6   5.9   1.0  
Total Products $ 0.1 $ 31.0 $ 0.6 $ 31.2 $ 1.1
North America Services $ 3.3 $ 122.6 $ 3.0 $ 128.9 $ 9.4
International Services   7.2     7.3   0.2  
Total Services $ 3.3   $ 129.8   $ 3.0   $ 136.2   $ 9.6  
Total $ 3.5 $ 160.8 $ 3.6 $ 167.4 $ 10.7
Adjusted operating income
North America Products $ 0.8 4.1 % $ 2.3 9.5 % $ 0.7 3.2 % $ 4.1 6.3 % $ 2.8 4.4 %
International Products 2.0   9.1 % 0.7   3.4 % 1.2   4.8 % 3.1   5.0 % 1.6   2.3 %
Total Products $ 2.8 6.7 % $ 3.0 6.8 % $ 1.9 4.0 % $ 7.2 5.7 % $ 4.5 3.3 %
North America Services $ 7.2 4.2 % $ 7.6 4.1 % $ 9.9 5.0 % $ 20.2 3.7 % $ 29.2 4.9 %
International Services 0.5   6.5 % 0.3   4.6 % 0.8   9.7 % 1.4   6.3 % 1.6   7.1 %
Total Services $ 7.7   4.3 % $ 7.9   4.1 % $ 10.7   5.2 % $ 21.5   3.8 % $ 30.8   5.0 %
Total     $ 10.5       4.7 %     $ 10.9       4.6 %     $ 12.6       5.0 %     $ 28.8       4.2 %     $ 35.3       4.7 %

n/m = not meaningful

 

EBITDA and Operating EBITDA

Management believes that EBITDA, defined as Net income (loss) plus provision (benefit) for income taxes, interest, depreciation and amortization, is a widely-accepted measure of profitability that may be used to measure the Company's ability to service its debt. Operating EBITDA, defined as EBITDA plus stock compensation expense and goodwill impairment loss may also be used to measure the Company's ability to service its debt.

A reconciliation of Net income (loss) to EBITDA and Operating EBITDA is presented below:

                   
In millions and may not foot due to rounding     3Q16     2Q16     3Q15     3QYTD16     3QYTD15
Net income (loss) $ 5.7 $ (129.8 ) $ 5.3 $ (123.4 ) $ 12.4
Provision (benefit) for income taxes 0.1 (21.5 ) 2.4 (19.4 ) 8.6
Interest expense, net 1.2 1.1 1.2 3.7 3.3
Intangibles amortization 2.6 2.6 2.6 7.8 7.9
Depreciation 2.2       2.1       1.7       6.3       5.1
EBITDA $ 11.8 $ (145.6 ) $ 13.3 $ (125.0 ) $ 37.4
Stock compensation expense 1.1 0.9 1.3 4.3 4.9
Goodwill impairment loss   157.3     157.3  
Operating EBITDA     $ 12.9       $ 12.5       $ 14.6       $ 36.5       $ 42.4
 

Free cash flow

Management believes that free cash flow, defined by the Company as Net cash provided by (used for) operating activities less net capital expenditures, plus or minus Foreign currency exchange impact on cash, plus Proceeds from stock option exercises, is an important measurement of liquidity as it represents the total cash available to the Company.

A reconciliation of Net cash provided by (used for) operating activities to free cash flow is presented below:

                   
In millions and may not foot due to rounding     3Q16     2Q16     3Q15     3QYTD16     3QYTD15
Net cash provided by (used for) operating activities $ 28.8 $ (6.5 ) $ 0.4 $ 14.9 $ 9.5
Net capital expenditures (3.6 ) (2.5 ) (2.7 ) (8.0 ) (6.2 )
Foreign currency exchange impact on cash 0.1       0.6       (0.3 )     0.8       (1.5 )
Free cash flow before stock option exercises $ 25.3 $ (8.4 ) $ (2.6 ) $ 7.7 $ 1.8
Proceeds from the exercise of stock options          
Free cash flow     $ 25.3       $ (8.4 )     $ (2.6 )     $ 7.7       $ 1.8  
 

Significant Balance Sheet ratios and Other Information

Information on certain balance sheet ratios, backlog and headcount is presented below:

           
Dollars In millions     3Q16     2Q16     3Q15
Days sales outstanding 62 days 59 days 62 days
Aggregate days sales outstanding 80 days 83 days 84 days
Net inventory turns 11.7x 11.8x 10.6x
Six-month order backlog $ 172.7 $ 182.3 $ 169.2
Headcount 3,637 3,677 3,913
Net Debt $ 110.7 $ 131.0 $ 142.8
Leverage ratio     2.8       3.2       3.1
 

Contacts

Black Box Corporation
Timothy C. Huffmyer
Vice President, Chief Financial Officer and Treasurer
724-873-6788
investors@blackbox.com

Release Summary

Black Box Corporation Reports Third Quarter of Fiscal 2016 Results

Contacts

Black Box Corporation
Timothy C. Huffmyer
Vice President, Chief Financial Officer and Treasurer
724-873-6788
investors@blackbox.com