Vistance Networks, Inc. · NASDAQ:VISN
Vistance Networks — Q2 2018 Earnings Presentation
19 slides from Vistance Networks's earnings presentation, Jul 31, 2018
Slide 1: Second Quarter 2018 Results
Second Quarter 2018 Results July 31, 2018 Eddie Edwards Alex Pease President and Executive Vice President Chief 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 • Second quarter 2018 results • Year-over-year growth across segments • Cash flow and liquidity • Enhancing balance sheet flexibility / strategic debt repayment • Third quarter and reaffirmed full year 2018 outlook 3 3
Slide 4: Q2 2018 Results
Q2 2018 Results Upper end of guidance range Revenue Operating Income(1) Diluted Earnings Per Share (in millions) (in millions) $241 $251 $0.68 Adjusted(2) $189 Adjusted(2) $0.60 $1,240 $0.49 $1,174 $1,121 $165 GAAP $136 $104 GAAP $0.34 $0.28 $0.17 Q2 2017 Q1 2018 Q2 2018 Q2 2017 Q1 2018 Q2 2018 Q2 2
Slide 5: CommScope Connectivity Solutions (CCS)
CommScope Connectivity Solutions (CCS) Revenue Operating Income(1) (in millions) (in millions) $146 $143 Adjusted(2) $726 $674 $740 $109 GAAP $74 $85 $53 Q2 2017 Q1 2018 Q2 2018 Q2 2017 Q1 2018 Q2 2018 • Mid-single-digit Outdoor Network Solutions growth driven by the North American market • Modest I
Slide 6: CommScope Mobility Solutions (CMS)
CommScope Mobility Solutions (CMS) Revenue Operating Income(1) (in millions) (in millions) $108 $95 Adjusted(2) $80 $448 $447 $499 $79 GAAP $62 $51 Q2 2017 Q1 2018 Q2 2018 Q2 2017 Q1 2018 Q2 2018 • Strong, double-digit growth in North America • Growth in Latin America and EMEA more than offset by de
Slide 7: Cash Flow and Liquidity
Cash Flow and Liquidity Expect to achieve more than $550m in cash from operations in 2018 (in millions) Q2 2017 Q2 2018 LTM Q2 2017 LTM Q2 2018 Cash flow from operations $ 87 $ 100 $ 545 $ 531 Capital expenditures, net of capex related to BNS integration(1) (18) (17) (63) (69) Cash paid for integrat
Slide 8: Solid progress on identifying growth opportunities
Solid progress on identifying growth opportunities 1. Identifying additional opportunities to expand addressable markets 2. Strategic debt paydown Gross Leverage Ratio(2): 4.7x • Will repay $400 million of term loan Net Leverage Ratio(2): on July 31, 2018(1) 4.1x 3. Focus on driving operational effi
Slide 9: Outlook
Outlook(1) Q3 2018 Guidance Reaffirmed Full Year 2018 Guidance • Sales of $1.19 billion - $1.24 billion • Sales of $4.675 billion - $4.825 billion • Operating income of $145 million - $169 • Operating income of $540 million - $585 million million • Non-GAAP adjusted operating income of • Non-GAAP ad
Slide 10: Appendix
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
Statements Thre e Months Ende d Six Months Ende d June 30, June 30, 2018 2017 2018 2017 of Operations Net sales $ 1,239,856 $ 1,174,090 $ 2,360,373 $ 2,311,375 Operating costs and expenses: Cost of sales 768,546 702,325 1,477,663 1,385,803 Selling, general and administrative 185,197 207,640 370,328
Slide 12: Balance Sheets
June 30, 2018 De ce mber 31, 2017 Balance Sheets Assets Cash and cash equivalents $ 545,701 $ 453,977 Accounts receivable, less allowance for doubtful accounts of $19,123 and $13,976, respectively 1,023,716 898,829 Inventories, net 479,468 444,941 Prepaid expenses and other current assets 123,371 14
Slide 13: Statements of Cash Flows
Thre e Months Ende d Six Months Ende d Statements of June 30, June 30, 2018 2017 2018 2017 Operating Activities: Cash Flows Net income $ 65,922 $ 55,464 $ 99,657 $ 89,026 Adjustments to reconcile net income to net cash generated by operating activities: Depreciation and amortization 88,944 90,052 17
Slide 14: Sales by Region
Sales by Region (Unaudited -- In millions) % Change Q2 2018 Q2 2017 YOY United States $ 714.6 $ 643.9 11.0 % Europe, Middle East and Africa 253.4 235.8 7.5 Asia Pacific 183.2 203.8 (10.1) Caribbean and Latin America 61.6 56.1 9.8 Canada 27.1 34.5 (21.4) Total Net Sales $ 1,239.9 $ 1,174.1 5.6 % 14
Slide 15: Segment Information
Segment Information (Unaudited -- In millions) Sales by Segment % Change Q2 2018 Q1 2018 Q2 2017 S equential YOY Connectivity Solutions $ 740.5 $ 673.6 $ 725.7 9.9 % 2.0 % Mobility Solutions 499.4 446.9 448.4 11.7 % 11.4 % Total Net Sales $ 1,239.9 $ 1,120.5 $ 1,174.1 10.7 % 5.6 % Non-GAAP Adjusted
Slide 16: Adjusted Operating Income and Adjusted EBITDA Reconciliation by Quarter
Adjusted Operating Income and Adjusted Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017 EBITDA Operating income, as reported $ 164.7 $ 103.7 $ 90.3 $ 125.4 $ 136.4 Amortization of purchased intangible assets 66.4 67.2 68.1 68.3 67.0 Reconciliation Restructuring costs, net 7.2 5.5 19.3 5.4 13.8 Equity-based c
Slide 17: Quarterly Adjusted Operating Income Reconciliation by Segment
Connectivity Mobility Quarterly Operating income, as reported $ S olutions 85.4 S olutions $ 79.3 Total $ 164.7 Adjusted Amortization of purchased intangible assets 45.0 21.4 66.4 Restructuring costs, net 4.7 2.5 7.2 Equity-based compensation 7.2 4.6 11.8 Operating Integration and transaction costs
Slide 18: Adjusted Net Income Reconciliation
Adjusted Net Three Months Ended S ix Months Ended June 30, June 30, 2018 2017 2018 2017 Income Operating income, as reported Adjustments: $ 164.7 $ 136.4 $ 268.4 $ 256.4 Reconciliation Amortization of purchased intangible assets 66.4 67.0 133.7 134.6 Restructuring costs, net 7.2 13.8 12.7 19.2 Equit
Slide 19: Outlook GAAP to Non-GAAP Reconciliation
Outlook GAAP Outlook Three Months Ended to Non-GAAP S eptember 30, Full Year 2018 2018 Reconciliation Operating income Adjustments: Amortization of purchased intangible assets $145 - $169 $66 $540 - $585 $265 (Unaudited -- In millions) Equity-based compensation $12 $50 (1) Restructuring costs, integ