Vistance Networks, Inc. · NASDAQ:VISN
Vistance Networks — CommScope Holding Company — Q3 2017 Earnings Presentation
19 slides from Vistance Networks's earnings presentation, Nov 1, 2017
Slide 1: Third Quarter 2017 Results
Third Quarter 2017 Results November 1, 2017 Eddie Edwards Mark Olson President and Chief Executive Vice President Executive Officer and Chief Financial Officer
Slide 2: Safe harbor
Safe harbor Caution Regarding Forward Looking Statements This presentation or any other oral or written statements made by us or on our behalf may include forward-looking statements that reflect our current views with respect to future events and financial performance. These forward-looking statemen
Slide 3: Agenda
Agenda • Third quarter 2017 results • Segment review • Cash flow and capital structure • Capital allocation priorities • Fourth quarter and full year 2017 outlook 3 3
Slide 4: Q3 2017 Results
Q3 2017 Results Revenue(1) Operating Income (1) Diluted Earnings Per Share (1) (in millions) (in millions) $1,294 $297 $0.81 $1,174 $1,129 $242 $224 $0.60 $181 $0.55 $0.48 Adjusted(2) $138 $127 Adjusted(2) $0.28 $0.26 GAAP GAAP Q3 2016 Q2 2017 Q3 2017 Q3 2016 Q2 2017 Q3 2017 Q3 2016 Q2 2017 Q3 2017
Slide 5: CommScope Connectivity Solutions (CCS)
CommScope Connectivity Solutions (CCS) Revenue(1) Operating Income(1) (in millions) (in millions) $189 $819 $726 $709 $146 $139 $105 Adjusted(2) $75 $71 GAAP Q3 2016 Q2 2017 Q3 2017 Q3 2016 Q2 2017 Q3 2017 • Three customers accounted for > ¾ of YOY revenue decline • Expect near-term recovery and gro
Slide 6: CommScope Mobility Solutions (CMS)
CommScope Mobility Solutions (CMS) Revenue Operating Income (in millions) (in millions) $107 $475 $448 $96 $420 $84 $76 $63 Adjusted(1) $56 GAAP Q3 2016 Q2 2017 Q3 2017 Q3 2016 Q2 2017 Q3 2017 • One customer accounted for ~ 2/3 of YOY revenue decline • Confident in FirstNet opportunity • Ongoing pro
Slide 7: Cash Flow And Capital Structure
Cash Flow And Capital Structure Cash Flow Highlights Major Debt Maturities as of Sep 30, 2017 (in millions) Q3 2016(1) Q3 2017 (in millions, except ratio) Cash flow from operations $ 266 $ 145 LTM Adjusted EBITDA: $1,017 Capital expenditures, net of capital expenditures related to BNS integration(2)
Slide 8: Capital Allocation Priorities
Capital Allocation Priorities Priorities for Cash Actions Since 2015 BNS Acquisition Reinvest in the Invested ~$200m in R&D and ~$70m in Capex annually business Acquired Airvana & Cable Exchange for ~$165m Debt reduction Reduced debt by $840m(1) and expect to reach goal of approx. $1B by year end Re
Slide 9: Outlook
Outlook(1) Q4 2017 Guidance Full Year 2017 Outlook • Sales of $1.09 billion - $1.14 billion • Sales of $4.53 billion - $4.58 billion • Operating income of $105 million - $120 million • Operating income of $491 million - $506 million • Non-GAAP adjusted operating income of • Non-GAAP adjusted operati
Slide 10: Appendix: Non-GAAP Financial Measures
Appendix Non-GAAP Financial Measures CommScope management believes that presenting certain non-GAAP financial measures provides meaningful information to investors in understanding operating results and may enhance investors' ability to analyze financial and business trends. Non-GAAP measures are no
Slide 11: Statements of Operations
Three Months Ended Nine Months Ended Statements September 30, September 30, 2017 2016 2017 2016 Net sales $ 1,128,775 $ 1,293,948 $ 3,440,150 $ 3,744,715 of Operations Operating costs and expenses: Cost of sales 699,145 751,097 2,082,910 2,201,014 Selling, general and administrative 184,671 220,835
Slide 12: Balance Sheets
September 30, 2017 December 31, 2016 Balance Sheets Assets Cash and cash equivalents $ 411,242 $ 428,228 Accounts receivable, less allowance for doubtful accounts of $19,060 and $17,211, respectively 930,739 952,367 Inventories, net 485,062 473,267 (Unaudited -- In thousands, except Prepaid expenses
Slide 13: Statements of Cash Flows
Thre e Months Ende d Nine Months Ende d Se pte mbe r 30, Se pte mbe r 30, Statements of 2017 2016 2017 2016 Operating Activities: Net income $ 51,157 $ 93,831 $ 140,183 $ 168,372 Cash Flows Adjustments to reconcile net income to net cash generated by operating activities: Depreciation and amortizati
Slide 14: Sales by Region
Sales by Region (Unaudited -- In millions) % Change Q3 2017 Q2 2017 Q3 2016 S equential YOY United States $ 595.3 $ 643.9 $ 712.2 (7.5) % (16.4) % Europe, Middle East and Africa 231.0 235.8 233.9 (2.0) % (1.2) % Asia Pacific 218.6 203.8 245.9 7.3 % (11.1) % Central and Latin America 62.2 56.1 69.2 1
Slide 15: Segment Information
Segment Information (Unaudited -- In millions) Sales by Segment % Change Q3 2017 Q2 2017 Q3 2016 Sequential YOY Connectivity Solutions $ 708.7 $ 725.7 $ 819.2 (2.3) % (13.5) % Mobility Solutions 420.1 448.4 474.7 (6.3) % (11.5) % Total Net Sales $ 1,128.8 $1,174.1 $ 1,293.9 (3.9) % (12.8) % Non-GAAP
Slide 16: Adjusted Operating Income and EBITDA Reconciliation by Quarter
Adjusted Operating Income and Adjusted Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 Operating income, as reported $ 126.8 $ 137.8 $ 121.4 $ 119.4 $ 180.7 Amortization of purchased intangible assets 68.3 67.0 67.6 72.9 74.6 EBITDA Restructuring costs, net Equity-based compensation 5.4 11.0 13.8 11.2 5.4 9
Slide 17: Quarterly Adjusted Operating Income Reconciliation by Segment
Third Quarter 2017 Non-GAAP Adjusted Operating Income Reconciliation by Segment Quarterly Connectivity S olutions Mobility S olutions Total Adjusted Operating income, as reported $ 71.2 $ 55.6 $ 126.8 Amortization of purchased intangible assets 44.2 24.1 68.3 Restructuring costs, net 5.6 (0.2) 5.4 O
Slide 18: Adjusted Net Income Reconciliation
Adjusted Net Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Income Operating income, as reported $ 126.8 $ 180.7 $ 386.0 $ 455.3 Adjustments: Amortization of purchased intangible assets 68.3 74.6 202.9 224.3 Reconciliation Restructuring costs, net Equity-based c
Slide 19: Outlook GAAP to Non-GAAP Reconciliation
Outlook GAAP Three Months Outlook to Non-GAAP Ended December 31, Full Year 2017 2017 Reconciliation Operating income Adjustments: $105 - $120 $491 - $506 Amortization of purchased intangible assets $70 $270 (Unaudited -- In millions) Equity-based compensation $10 $40 (1) Restructuring costs, integra
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