Black Box Corporation
BLACK BOX CORP (Form: 8-K, Received: 05/09/2013 16:02:24)
                                                    

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): May 9, 2013


Black Box Corporation
(Exact Name of Registrant as Specified in its Charter)


Delaware
 
0-18706
 
95-3086563
(State or Other Jurisdiction
of Incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)

1000 Park Drive
Lawrence, Pennsylvania
 
15055
(Address of Principal Executive Offices)
 
(Zip Code)

Registrant's telephone number, including area code: (724) 746-5500

N/A
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


1

                                                    

Item 2.02
Results of Operations and Financial Condition.

On May 9, 2013 , Black Box Corporation (the “Company”) issued a press release announcing financial results for the fiscal quarter and fiscal year ended March 31, 2013 . A copy of the press release is furnished as Exhibit 99.1 to this report.

The Company provides quarterly and annual financial statements that are prepared in accordance with generally accepted accounting principles (“GAAP”). In addition, the press release attached hereto as Exhibit 99.1 contains non-GAAP financial information which has been identified as such. The presentation of this non-GAAP financial information is not meant to be considered in isolation or as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The press release attached hereto also includes a reconciliation of the non-GAAP financial information provided with the comparable financial information reported in accordance with GAAP. The Company believes that all readers of such financial information should properly review and understand the disclosed material limitations associated with the non-GAAP financial measures included in the press release as well as the difference between the non-GAAP and the GAAP financial information.


Item 9.01
Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No .
Description
99.1
Press Release dated May 9, 2013


2

                                                    

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BLACK BOX CORPORATION

Date: May 9, 2013

/s/ TIMOTHY C. HUFFMYER                                 
Timothy C. Huffmyer
Vice President, Chief Financial Officer and
Treasurer (Principal Accounting Officer)



3

                                                    

Exhibit Index

Exhibit No.
Description
99.1
Press Release dated May 9, 2013




4
Exhibit 99.1     

 
                    
Contact
Black Box Corporation
Gary Doyle
Vice President of Corporate Communications and Investor Relations    
Phone: (724) 873-6788
Email: investors@blackbox.com

FOR IMMEDIATE RELEASE

BLACK BOX CORPORATION REPORTS FOURTH QUARTER OF FISCAL 2013 RESULTS

PITTSBURGH, PENNSYLVANIA, May 9, 2013 - Black Box Corporation (NASDAQ:BBOX), a leading communications system integrator dedicated to designing, sourcing, implementing and maintaining today's complex communications solutions, today reported results for the fourth quarter of Fiscal 2013 and the fiscal year ended March 31, 2013.

Fourth quarter of Fiscal 2013 diluted earnings per share was 44 ¢ on net income of $7.2 million or 3.0% of revenues compared to diluted earnings per share of 64 ¢ on net income of $11.2 million or 4.4% of revenues for the same quarter last year. On a sequential quarter comparison basis, third quarter of Fiscal 2013 diluted earnings per share was 52 ¢ on net income of $8.5 million or 3.4% of revenues. Operating earnings per share (which is a non-GAAP term and is defined below) for the fourth quarter of Fiscal 2013 was 67 ¢ on operating net income (which is a non-GAAP term and is defined below) of $10.9 million or 4.6% of revenues compared to operating earnings per share of 65 ¢ on operating net income of $11.4 million or 4.4% of revenues for the same quarter last year. 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.

Fourth quarter of Fiscal 2013 total revenues were $238 million , a decrease of 7% from $256 million for the same quarter last year. On a sequential quarter comparison basis, third quarter of Fiscal 2013 total revenues were $252 million .

Fourth quarter of Fiscal 2013 cash provided by operating activities was $16 million or 221% of net income, compared to cash provided by operating activities of $22 million or 195% of net income for the same quarter last year. Fourth quarter of Fiscal 2013 free cash flow (which is a non-GAAP term and is defined below) was $13 million compared to $20 million for the same quarter last year. On a sequential quarter comparison basis, third quarter of Fiscal 2013 cash provided by operating activities was $16 million or 191% of net income and free cash flow was $15 million . During the fourth quarter of Fiscal 2013 , Black Box invested $4 million to repurchase common stock and $1 million to pay dividends.

Fiscal 2013 diluted earnings per share was $1.73 on net income of $28.8 million or 2.9% of revenues compared to diluted loss per share of $13.98 on net loss of $247.7 million or (22.8)% of revenues for the same period last year. Fiscal 2013 operating earnings was $2.67 on operating net income of $44.6 million or 4.5% of revenues compared to operating earnings per share of $3.03 on operating net income of $54.0 million or 5.0% of revenues for the same period last year.

Fiscal 2013 total revenues were $998 million , a decrease of 8% from $1,088 million for the same period last year.

Fiscal 2013 cash provided by operating activities was $47 million or 162% of net income, compared to cash provided by operating activities of $66 million or (27)% of net loss for the same period last year. Fiscal 2013 free cash flow was $40 million compared to $56 million for the same period last year. During Fiscal 2013 , Black Box invested $37 million to repurchase common stock and $5 million to pay dividends.

The Company's six-month order backlog was $201 million at March 31, 2013 , compared to $199 million for the same quarter last year. On a sequential quarter-end comparison basis, the Company's six-month order backlog was $188 million at December 29, 2012 .


1

Exhibit 99.1     

For Fiscal 2014 , the Company is targeting reported revenues of approximately $1.00 billion to $1.02 billion and corresponding operating earnings per share in the range of $2.70 to $2.90 . Included in these projections is an effective tax rate of 39.5% . For the first quarter of Fiscal 2014 , the Company is targeting reported revenues of approximately $238 million to $243 million and corresponding operating earnings per share in the range of 53 ¢ to 58 ¢. These targets exclude intangibles amortization and the impact of changes in the fair market value of the Company's interest-rate swaps, and are before any new mergers and acquisition activity that has not been announced.

Commenting on the fourth quarter of Fiscal 2013 results, Michael McAndrew, President and Chief Executive Officer, said, "Our results from the fourth quarter and Fiscal 2013 reflect both the challenges and opportunities in the markets that we serve.  We continue to experience top line revenue pressure however, pricing has stabilized and our business model continues to generate significant positive operating cash flow."

"As we enter Fiscal 2014, I am confident that the programs we are putting in place will allow us to grow share in our existing markets while profitably expanding into new markets.  Through execution of these programs, I expect Black Box to deliver organic revenue growth while continuing to generate significant operating cash flow in the new fiscal year."

The Company will conduct a conference call beginning at 5:00 p.m. Eastern Daylight Time today, May 9, 2013 . Michael McAndrew, President and Chief Executive Officer, will host the call. To participate in the call, please dial 612-332-0107 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 287111 . A live, listen-only audio webcast of the call will be available through a link on the Investor Relations page of the Company's Web site at http://www.blackbox.com . A webcast replay of the call will also be archived on Black Box's Web site for a limited period of time following the conference call.

Black Box is a leading communications system integrator dedicated to designing, sourcing, implementing and maintaining today's complex communications solutions. Black Box services more than 175,000 clients in approximately 150 countries with approximately 200 offices throughout the world. 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, successful marketing of the Company's product and services offerings, successful implementation of the Company's M&A program, including identifying appropriate targets, consummating transactions and successfully integrating the businesses, successful implementation of our 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, 2012 . 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.

2

Exhibit 99.1     

BLACK BOX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS

In thousands, except par value
March 31, 2013

March 31, 2012

Assets
 
 
Cash and cash equivalents
$
30,720

$
22,444

Accounts receivable, net
152,967

163,888

Inventories, net
55,469

56,956

Costs/estimated earnings in excess of billings on uncompleted contracts
101,458

87,634

Other assets
26,068

22,678

Total current assets
366,682

353,600

Property, plant and equipment, net
27,720

27,109

Goodwill, net
345,397

346,438

Intangibles, net
110,668

126,541

Other assets
27,534

34,335

Total assets
$
878,001

$
888,023

Liabilities
 
 
Accounts payable
$
66,236

$
71,095

Accrued compensation and benefits
25,186

31,151

Deferred revenue
33,869

35,601

Billings in excess of costs/estimated earnings on uncompleted contracts
13,386

14,315

Income taxes
6,650

2,574

Other liabilities
37,126

32,697

Total current liabilities
182,453

187,433

Long-term debt
187,648

179,621

Other liabilities
25,653

26,585

Total liabilities
$
395,754

$
393,639

Stockholders’ equity
 
 
Common stock
$
26

$
26

Additional paid-in capital
486,075

478,726

Retained earnings
370,775

347,242

Accumulated other comprehensive income
1,457

7,262

Treasury stock, at cost
(376,086
)
(338,872
)
Total stockholders’ equity
$
482,247

$
494,384

Total liabilities and stockholders’ equity
$
878,001

$
888,023

 
 
 


3

Exhibit 99.1     

BLACK BOX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 
Three-months ended
Fiscal Year ended
 
March 31
March 31
In thousands, except per share amounts
2013

2012

2013

2012

Revenues
 
 
 
 
Products
$
44,212

$
49,213

$
181,704

$
198,640

On-Site services
193,487

206,779

816,082

888,888

Total
237,699

255,992

997,786

1,087,528

Cost of sales
 
 
 
 
Products
24,189

27,440

101,201

110,455

On-Site services
134,640

145,816

576,655

630,577

Total
158,829

173,256

677,856

741,032

Gross profit
78,870

82,736

319,930

346,496

Selling, general & administrative expenses
62,836

62,803

249,924

255,347

Goodwill impairment loss



317,797

Intangibles amortization
3,321

3,541

13,737

13,025

Operating income (loss)
12,713

16,392

56,269

(239,673
)
Interest expense (income), net
1,134

1,458

6,090

5,148

Other expenses (income), net
(72
)
369

3,716

1,245

Income (loss) before provision (benefit) for income taxes
11,651

14,565

46,463

(246,066
)
Provision (benefit) for income taxes
4,428

3,323

17,657

1,668

Net income (loss)
$
7,223

$
11,242

$
28,806

$
(247,734
)
Earnings (loss) per common share
 
 
 
 
Basic
$
0.45

$
0.64

$
1.73

$
(13.98
)
Diluted
$
0.44

$
0.64

$
1.73

$
(13.98
)
Weighted-average common shares outstanding
 
 
 
 
Basic
16,211

17,480

16,627

17,725

Diluted
16,328

17,591

16,689

17,725

Dividends per share
$
0.08

$
0.07

$
0.32

$
0.28



4

Exhibit 99.1     

BLACK BOX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 
Three-months ended
Fiscal Year ended
 
March 31
March 31
In thousands
2013

2012

2013

2012

Operating Activities
 
 
 
 
Net income (loss)
$
7,223

$
11,242

$
28,806

$
(247,734
)
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities
 
 
 
 
Intangibles amortization and depreciation
4,696

4,878

19,123

18,459

Loss (gain) on sale of property
21

(87
)
(105
)
(253
)
Deferred taxes
588

(731
)
3,425

(23,328
)
Stock compensation expense
1,315

1,791

7,712

9,296

Change in fair value of interest-rate swaps
(272
)
271

606

(530
)
Goodwill impairment loss



317,797

Joint venture investment loss


2,670


Changes in operating assets and liabilities (net of acquisitions)
 
 
 
 
Accounts receivable, net
4,683

11,308

10,047

135

Inventories, net
548

6,308

1,231

(3,540
)
Costs/estimated earnings in excess of billings on uncompleted contracts
8,787

17,598

(13,928
)
19,133

All other assets
(3,855
)
(296
)
(2,498
)
2,108

Billings in excess of costs/estimated earnings on uncompleted contracts
(4,781
)
(5,854
)
(908
)
(6,603
)
All other liabilities
(2,978
)
(24,481
)
(9,480
)
(19,119
)
Net cash provided by (used for) operating activities
$
15,975

$
21,947

$
46,701

$
65,821

Investing Activities
 
 
 
 
Capital expenditures
$
(2,238
)
$
(2,660
)
$
(6,323
)
$
(7,633
)
Capital disposals
175

93

389

280

Acquisition of businesses (payments)/recoveries

(25,816
)
17

(39,770
)
Prior merger-related (payments)/recoveries
(10
)
(121
)
(2,388
)
(1,295
)
Net cash provided by (used for) investing activities
$
(2,073
)
$
(28,504
)
$
(8,305
)
$
(48,418
)
Financing Activities
 
 
 
 
Proceeds (repayments) from long-term debt
$
(4,168
)
$
5,755

$
7,735

$
(1,911
)
Proceeds (repayments) from short-term debt
(1,399
)

4,005


Deferred financing costs

(1,743
)
(20
)
(1,743
)
Purchase of treasury stock
(4,192
)

(37,214
)
(15,292
)
Proceeds from the exercise of stock options




Payment of dividends
(1,304
)
(1,224
)
(5,206
)
(4,798
)
Increase (decrease) in cash overdrafts
(689
)

1,237


Net cash provided by (used for) financing activities
$
(11,752
)
$
2,788

$
(29,463
)
$
(23,744
)
Foreign currency exchange impact on cash
$
(899
)
$
754

$
(657
)
$
(2,427
)
Increase/(decrease) in cash and cash equivalents
$
1,251

$
(3,015
)
$
8,276

$
(8,768
)
Cash and cash equivalents at beginning of period
29,469

25,459

22,444

31,212

Cash and cash equivalents at end of period
$
30,720

$
22,444

$
30,720

$
22,444

 
 
 
 
 


5

Exhibit 99.1     

Non-GAAP Financial Measures

As a supplement to United States Generally Accepted Accounting Principles ("GAAP"), the Company provides non-GAAP financial measures such as free cash flow, operating income before provision for income taxes ("EBIT"), operating net income, operating earnings per share ("EPS"), Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") (as adjusted), Adjusted EBITDA (as adjusted), adjusted operating income and same-office revenue comparisons to illustrate the Company's operational performance. These non-GAAP financial measures exclude the impact of certain items and, therefore, have not been calculated in accordance with GAAP. Pursuant to the requirements of Regulation G, the Company has provided explanations regarding use by the Company's management ("Management") and the usefulness of non-GAAP financial measures, definitions of the non-GAAP financial measures and reconciliations to the most directly comparable GAAP financial measures, which are provided below.

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. Moreover, the Company has historically reported these non-GAAP financial measures as a means of providing consistent and comparable information with past reports of financial results.

While Management believes these non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of non-GAAP financial measures. The limitations include (i) the 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, (ii) the non-GAAP financial measures exclude certain non-cash amortization of intangible assets on acquisitions, however, they do not specifically exclude the added benefits of these costs, such as revenue and contributing operating margin, (iii) the non-GAAP financial measures exclude the non-cash change in fair value of the Company's interest-rate swaps which will continue to impact the Company's earnings until the interest-rate swaps are settled, (iv) the non-GAAP financial measures exclude the non-cash goodwill impairment loss, (v) the non-GAAP financial measures exclude costs, primarily cash costs, for restructuring incurred during the periods reported in an attempt to right-size the organization and more appropriately align the expense structure with anticipated revenues and changing market demand for its solutions and services that will impact future operating results, (vi) the non-GAAP financial measures exclude the non-cash joint venture investment loss and (vii) there is no assurance the excluded items in the non-GAAP financial measures will not occur in the future. The Company compensates for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reviewing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures.

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


Free cash flow

Management believes that free cash flow, defined by the Company as cash provided by (used for) operating activities less net capital expenditures, plus proceeds from stock 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. Management's reasons for exclusion of each item are explained in further detail below.

Net capital expenditures
The Company believes net capital expenditures must be taken into account along with cash provided by (used for) operating activities to more properly reflect the actual cash available to the Company. Net capital expenditures directly impact the availability of the Company's operating cash. Net capital expenditures are comprised of capital expenditures and capital disposals.

Foreign currency exchange impact on cash
Due to the size of the Company's international operations, and the ability of the Company to utilize cash generated from foreign operations locally without the need to convert such currencies to U.S. dollars on a regular basis, the Company believes that it is appropriate to adjust its operating cash flows to take into account the positive or negative impact of such adjustments as such adjustment provides an appropriate measure of the availability of the Company's operating cash on a world-wide basis. A limitation of adjusting cash flows to account for the foreign currency impact is that it may not provide an accurate measure of cash available in U.S. dollars.

6

Exhibit 99.1     

Proceeds from stock option exercises
The Company believes that proceeds from stock option exercises should be added to cash provided by (used for) operating activities to more accurately reflect the actual cash available to the Company. The Company historically has demonstrated a recurring inflow of cash related to its stock-based compensation plans and, since this cash is immediately available to the Company, it directly impacts the availability of the Company's operating cash. The amount of proceeds from stock option exercises is dependent upon a number of variables, including the number and exercise price of outstanding options and the trading price of the Company's common stock. In addition, the timing of stock option exercises is under the control of the individual option holder and is not under the control of the Company. As a result, there can be no assurance as to the timing or amount of any proceeds from stock option exercises.

A reconciliation of cash provided by (used for) operating activities to free cash flow is presented below:
 
4Q13

3Q13

4Q12

FY13

FY12

Net cash provided by (used for) operating activities
$
15,975

$
16,286

$
21,947

$
46,701

$
65,821

Net capital expenditures
(2,063
)
(1,104
)
(2,567
)
(5,934
)
(7,353
)
Foreign currency exchange impact on cash
(899
)
262

754

(657
)
(2,427
)
Free cash flow before stock option exercises
$
13,013

$
15,444

$
20,134

$
40,110

$
56,041

Proceeds from the exercise of stock options





Free cash flow
$
13,013

$
15,444

$
20,134

$
40,110

$
56,041



Operating net income and operating earnings per share

Management believes that operating net income, defined by the Company as net income (loss) plus provision (benefit) for income taxes and reconciling items 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. Reconciling items include amortization of intangible assets on acquisitions, the change in fair value of the interest-rate swaps, the goodwill impairment loss and the joint venture investment loss, each of which are non-cash charges, and restructuring, which is a cash charge. Management's reason for exclusion of each item is explained in further detail below.

Amortization of intangible assets on acquisitions
The Company incurs non-cash amortization expense from intangible assets related to various acquisitions it has made in recent years. Management excludes these expenses and their related tax impact for the purpose of calculating non-GAAP financial measures when it evaluates the continuing operational performance of the Company because these costs are fixed at the time of an acquisition, are then amortized over a period of several years after the acquisition and generally cannot be changed or influenced by Management after the acquisition.

Change in fair value of the interest-rate swaps
To mitigate the risk of interest-rate fluctuations associated with the Company's variable rate debt, the Company enters into interest-rate swaps (“interest-rate swaps”) that do not qualify as a cash flow hedge. Thus, the Company records the change in fair value of the interest-rate swaps as an asset/liability within the Company's Condensed Consolidated Balance Sheets with the offset to Interest expense (income) within the Company's Condensed Consolidated Statements of Income. Management excludes this non-cash expense and the related tax impact for the purpose of calculating non-GAAP financial measures when it evaluates the continuing operational performance of the Company because these costs generally cannot be changed or influenced by Management.

Goodwill impairment
The Company incurred a loss during the third quarter of Fiscal 2012 due to goodwill impairment in its North America and Europe reporting segments. Management excludes these expenses and their related tax impact for the purpose of calculating non-GAAP financial measures when it evaluates the continuing operational performance of the Company because these costs are generally non-recurring and cannot be changed or influenced by Management.


7

Exhibit 99.1     

Restructuring
The Company believes that incurring costs for employee severance and facility consolidations in the current period(s) in an attempt to right-size the organization and more appropriately align the expense structure with anticipated revenues and changing market demand for its solutions and services will result in a long-term positive impact on financial performance in the future. Restructuring costs are presented in accordance with GAAP in the Company's Condensed Consolidated Statements of Operations. However, due to the amount of additional costs incurred during a single or possibly successive periods, Management believes that exclusion of these costs and their related tax impact provides a more accurate reflection of the Company's ongoing financial performance.

Joint venture investment loss
The Company incurred a loss during the third quarter of Fiscal 2013 due to the expected divestiture of our non-controlling interest in Genesis Networks Integration Services, LLC, a minority business enterprise joint venture company which was formed in conjunction with Genesis Networks Enterprises, LLC. Management excludes these expenses and their related tax impact for the purpose of calculating non-GAAP financial measures when it evaluates the continuing operational performance of the Company because these costs are generally non-recurring and cannot be changed or influenced by Management.

A reconciliation of net income (loss) to operating net income is presented below:
 
4Q13

3Q13

4Q12

FY13

FY12

Net income (loss)
$
7,223

$
8,518

$
11,242

$
28,806

$
(247,734
)
Provision (benefit) for income taxes
4,428

5,222

3,323

17,657

1,668

Income (loss) before provision (benefit) for income taxes
$
11,651

$
13,740

$
14,565

$
46,463

$
(246,066
)
 
 
 
 
 
 
Reconciling Items
 
 
 
 
 
Amortization of intangible assets on acquisitions
$
3,315

$
3,472

$
3,530

$
13,713

$
12,980

Change in fair value of interest-rate swaps
(272
)
(317
)
271

606

(530
)
Goodwill impairment loss




317,797

Restructuring expense
2,972

1,442


8,445


Joint venture investment loss

2,670


2,670


Total pre-tax reconciling items
$
6,015

$
7,267

$
3,801

$
25,434

$
330,247

 
 
 
 
 
 
Operating EBIT
$
17,666

$
21,007

$
18,366

$
71,897

$
84,181

Operational effective tax rate
38.0
%
38.0
%
38.0
%
38.0
%
35.9
%
Operational income taxes *
$
6,720

$
7,978

$
6,979

$
27,322

$
30,207

Operating net income
$
10,946

$
13,029

$
11,387

$
44,575

$
53,974

* The effective tax rate utilized to determine Operational income taxes was the Company's operational effective tax rate that excludes discreet tax items.

A reconciliation of Diluted EPS to Operating EPS is presented below:
 
4Q13

3Q13

4Q12

FY13

FY12

Diluted EPS
$
0.44

$
0.52

$
0.64

$
1.73

$
(13.98
)
EPS impact *
0.23

0.27

0.01

0.94

17.01

Operating EPS
$
0.67

$
0.79

$
0.65

$
2.67

$
3.03


* EPS impact is the result of excluding the provision (benefit) for income taxes and the reconciling items and utilizing an operational effective tax rate.


8

Exhibit 99.1     

EBITDA and Adjusted EBITDA

Management believes that EBITDA (as adjusted), defined as Net income (loss) plus provision (benefit) for income taxes, interest, depreciation, amortization, the goodwill impairment loss and the joint venture investment loss, is a widely-accepted measure of profitability that may be used to measure the Company's ability to service its debt. Adjusted EBITDA (as adjusted), defined as EBITDA plus stock compensation expense, may also be used to measure the Company's ability to service its debt. Stock compensation is an integral part of ongoing operations since it is considered similar to other types of compensation to employees. However, Management believes that varying levels of stock compensation expense could result in misleading period-over-period comparisons and is providing an adjusted disclosure which excludes stock compensation expense.

A reconciliation of Net income (loss) to EBITDA (as adjusted) and Adjusted EBITDA (as adjusted) is presented below:
 
4Q13

3Q13

4Q12

FY13

FY12

Net income (loss)
$
7,223

$
8,518

$
11,242

$
28,806

$
(247,734
)
Provision (benefit) for income taxes
4,428

5,222

3,323

17,657

1,668

Interest expense (income), net
1,134

1,133

1,458

6,090

5,148

Intangibles amortization and depreciation
4,696

4,777

4,878

19,123

18,459

Goodwill impairment loss




317,797

Joint venture investment loss

2,670


2,670


EBITDA (as adjusted)
$
17,481

$
22,320

$
20,901

$
74,346

$
95,338

Stock compensation expense
1,315

1,791

1,791

7,712

9,296

Adjusted EBITDA (as adjusted)
$
18,796

$
24,111

$
22,692

$
82,058

$
104,634



9

Exhibit 99.1     

Supplemental Information
The following supplemental information, including geographical segment results, service type results, same-office revenue comparisons and significant balance sheet ratios and other information is being provided for comparisons of reported results for the fourth quarter of Fiscal 2013 , third quarter of Fiscal 2013 , fourth quarter of Fiscal 2012 and Fiscal 2013 and 2012 . All dollar amounts are in thousands unless noted otherwise.


Geographical Segment Results
Management is presented with and reviews revenues, Operating income (loss) and Adjusted operating income by geographical segment. Adjusted operating income is defined by the Company as Operating income (loss) plus reconciling items. Reconciling items include amortization of intangible assets on acquisitions, goodwill impairment loss and restructuring. See above for additional details provided by Management regarding non-GAAP financial measures. Revenues , Operating income (loss) and Adjusted operating income for North America , Europe and All Other are presented below:
 
4Q13

3Q13

4Q12

FY13

FY12

Revenues
 
 
 
 
 
North America
$
204,505

$
215,650

$
219,867

$
862,957

$
943,717

Europe
24,619

26,488

25,476

97,114

105,492

All Other
8,575

9,951

10,649

37,715

38,319

Total
$
237,699

$
252,089

$
255,992

$
997,786

$
1,087,528

Operating income (loss)
 
 
 
 
 
North America
$
11,142

$
14,900

$
12,744

$
47,413

$
(214,448
)
% of North America revenues
5.4
%
6.9
%
5.8
%
5.5
%
(22.7
)%
Europe
$
1,182

$
1,848

$
1,834

$
5,191

$
(30,347
)
% of Europe revenues
4.8
%
7.0
%
7.2
%
5.3
%
(28.8
)%
All Other
$
389

$
964

$
1,814

$
3,665

$
5,122

% of All Other revenues
4.5
%
9.7
%
17.0
%
9.7
%
13.4
 %
Total
$
12,713

$
17,712

$
16,392

$
56,269

$
(239,673
)
% of Total revenues
5.3
%
7.0
%
6.4
%
5.6
%
(22.0
)%
Reconciling items (pre-tax)
 
 
 
 
 
North America
$
5,116

$
4,386

$
3,530

$
19,978

$
290,112

Europe
765

523


1,756

40,665

All Other
406

5


424


Total
$
6,287

$
4,914

$
3,530

$
22,158

$
330,777

Adjusted operating income
 
 
 
 
 
North America
$
16,258

$
19,286

$
16,274

$
67,391

$
75,664

% of North America revenues
7.9
%
8.9
%
7.4
%
7.8
%
8.0
 %
Europe
$
1,947

$
2,371

$
1,834

$
6,947

$
10,318

% of Europe revenues
7.9
%
9.0
%
7.2
%
7.2
%
9.8
 %
All Other
$
795

$
969

$
1,814

$
4,089

$
5,122

% of All Other revenues
9.3
%
9.7
%
17.0
%
10.8
%
13.4
 %
Total
$
19,000

$
22,626

$
19,922

$
78,427

$
91,104

% of Total revenues
8.0
%
9.0
%
7.8
%
7.9
%
8.4
 %


10

Exhibit 99.1     

Service Type Results
Management is presented with and reviews Revenues and Gross profit for Data Infrastructure , Voice Communications and Technology Products which are presented below:
 
4Q13

3Q13

4Q12

FY13

FY12

Revenues
 
 
 
 
 
Data Infrastructure
$
57,526

$
62,664

$
60,159

$
243,711

$
247,157

Voice Communications
135,961

142,571

146,620

572,371

641,731

Technology Products
44,212

46,854

49,213

181,704

198,640

Total
$
237,699

$
252,089

$
255,992

$
997,786

$
1,087,528

Gross profit
 
 
 
 
 
Data Infrastructure
$
14,938

$
16,556

$
15,922

$
63,370

$
62,032

% of Data Infrastructure revenues
26.0
%
26.4
%
26.5
%
26.0
%
25.1
%
Voice Communications
$
43,909

$
45,057

$
45,041

$
176,057

$
196,279

% of Voice Communications revenues
32.3
%
31.6
%
30.7
%
30.8
%
30.6
%
Technology Products
$
20,023

$
20,119

$
21,773

$
80,503

$
88,185

% of Technology Products revenues
45.3
%
42.9
%
44.2
%
44.3
%
44.4
%
Total
$
78,870

$
81,732

$
82,736

$
319,930

$
346,496

% of Total revenues
33.2
%
32.4
%
32.3
%
32.1
%
31.9
%


Same-office revenue comparisons
Management is presented with and reviews revenues on a same-office basis which excludes the effects of revenues from acquisitions.
While the information provided below is presented on a consolidated basis, the revenue from offices added as shown below relates to North America Voice Communications and North America Data Infrastructure . Same-office revenue for the Company's North America Voice Communications and North America Data Infrastructure segments can be determined by excluding the revenues from offices added since April 1, 2011 (for comparison of 4Q13 to 4Q12 and FY13 to FY12 ) or December 30, 2012 (for comparison of 4Q13 to 3Q13 ) as shown below.

Information on quarterly revenues on a same-office basis compared to the same period last year is presented below:
 
4Q13

4Q12

% Change

Reported revenues
$
237,699

$
255,992

(7
)%
Less revenue from Data Infrastructure offices added since 4/1/11 (1Q12)
(5,935
)
(6,025
)
 
Less revenue from Voice Communications offices added since 4/1/11 (1Q12)
(5,663
)
(4,996
)
 
Reported revenues on same-office basis
$
226,101

$
244,971

(8
)%
Foreign currency impact - Data Infrastructure
(73
)

 
Foreign currency impact - Voice Communications
(35
)

 
Foreign currency impact - Technology Products
350


 
Revenues on same-office basis (excluding foreign currency impact)
$
226,343

$
244,971

(8
)%

Information on quarterly revenues on a same-office basis compared to the sequential quarter is presented below:
 
4Q13

3Q13

% Change

Reported revenues
$
237,699

$
252,089

(6
)%
Less revenue from Data Infrastructure offices added since 12/30/12 (3Q13)


 
Less revenue from Voice Communications offices added since 12/30/12 (3Q13)


 
Reported revenues on same-office basis
$
237,699

$
252,089

(6
)%
Foreign currency impact - Data Infrastructure
24


 
Foreign currency impact - Voice Communications
8


 
Foreign currency impact - Technology Products
274


 
Revenues on same-office basis (excluding foreign currency impact)
$
238,005

$
252,089

(6
)%


11

Exhibit 99.1     

Information on year-to-date revenues on a same-office basis compared to the same period last year is presented below:
 
FY13

FY12

% Change

Reported revenues
$
997,786

$
1,087,528

(8
)%
Less revenue from Data Infrastructure offices added since 4/1/11 (1Q12)
(30,107
)
(6,025
)
 
Less revenue from Voice Communications offices added since 4/1/11 (1Q12)
(26,540
)
(25,428
)
 
Reported revenues on same-office basis
$
941,139

$
1,056,075

(11
)%
Foreign currency impact - Data Infrastructure
1,263


 
Foreign currency impact - Voice Communications
79


 
Foreign currency impact - Technology Products
3,746


 
Revenues on same-office basis (excluding foreign currency impact)
$
946,227

$
1,056,075

(10
)%


Significant Balance Sheet ratios and Other Information
Information on certain balance sheet ratios, backlog and headcount is presented below:
 
4Q13

 
3Q13

 
4Q12

 
Accounts receivable
 
 
 
 
 
 
Gross accounts receivable
$
159,267

 
$
164,870

 
$
170,161

 
Reserve $ / %
6,300

4.0%
6,302

3.8%
6,273

3.7%
Net accounts receivable
$
152,967

 
$
158,568

 
$
163,888

 
Days sales outstanding
54 days

 
53 days

 
52 days

 
Aggregate days sales outstanding
90 days

 
87 days

 
80 days

 
Inventory
 
 
 
 
 
 
Gross inventory
$
73,509

 
$
75,315

 
$
75,856

 
Reserve $ / %
18,040

24.5%
19,050

25.3%
18,900

24.9%
Net inventory
$
55,469

 
$
56,265

 
$
56,956

 
Net inventory turns
8.5x

 
9.1x

 
8.9x

 
Six-month order backlog
$
201,362

 
$
187,606

 
$
198,751

 
Team members
3,900

 
4,027

 
4,302

 


12