Slide 1: Q1 2020 Earnings Release
Q1 2020 EARNINGS RELEASE Conference Call | April 29, 2020 Q1 2020 Earnings Release |
Slide 2: Safe Harbor Statement
Safe Harbor Statement Our commentary and responses to your questions may contain forward-looking statements, including our outlook for the second quarter and full- year 2020, the impacts of COVID-19, the Grass Valley divestment plan and our restructuring program. Forward-looking statements include p
Slide 3: COVID-19 Actions
COVID-19 Actions 1 2 3 4 PROTECTING HELPING SUPPORTING OPTIMIZING our associates our communities our customers our business Prioritizing health and Donating surgical masks Committed to keeping Deploying safety and cabling / connectivity our customers countermeasures products for ventilator supplied
Slide 4: Delivering on Transformative Actions
Delivering on Transformative Actions DIVESTING STREAMLINING THE EXITING GRASS VALLEY COST STRUCTURE UNDIFFERENTIATED PRODUCT LINES Progressing as planned Increasing the size of the Approximately $250M copper toward closing the cost reduction program from cable revenue transaction in Q2 2020 $40M to
Slide 5: End Markets
End Markets Industrial Automation 46% Smart Buildings 25% 46% Aligned Alignedwith with growth growthmarkets markets 23% Broadband & 5G 6% Cybersecurity Based on management’s best estimates of percentages of total revenue Q1 2020 Earnings Release | 5
Slide 6: End Market Growth Dynamics Post COVID
End Market Growth Dynamics Post COVID Industrial Automation 46% Smart Buildings 25% Discrete Manufacturing 25% 8% • Government 4% • Consumer Products 5% 17% • Healthcare 2% • Material Handling 5% • Data Center 2% • Medical 4% • Semiconductor 3% 9% Other Industrial 21% • Energy 5% • Mass Transit 4% 2
Slide 7: End Market Growth Dynamics Post COVID
End Market Growth Dynamics Post COVID Industrial Automation 46% Smart Buildings 25% Discrete Manufacturing 25% 8% • Government 4% • Consumer Products 5% 17% 2% • Healthcare 2% • Material Handling 5% • Data Center 2% • Medical 4% • Other 2% • Semiconductor 3% 2% • Other Industrial 2% 9% Other Industr
Slide 8: End Market Growth Dynamics Post COVID
End Market Growth Dynamics Post COVID Industrial Automation 46% Smart Buildings 25% Discrete Manufacturing 25% 8% • Government 4% • Consumer Products 5% 17% 2% • Healthcare 2% • Material Handling 5% • Data Center 2% • Medical 4% • Other 2% • Semiconductor 3% 2% 15% • Commercial Real Estate 11% • Oth
Slide 9: Q1 2020 Financial Highlights
Q1Financial Goals 2020 Highlights Leverage of REVENUES EPS Cash on hand of 2.8x net debt $294M at the end to EBITDA of the quarter Fixed interest Plus subsequent rate debt with no $190M revolver $463.5M $0.67 maintenance draw provided covenants and no ample liquidity of maturities until over $450M 2
Slide 10: Q1 2020 Segment Overview
Q1 2020 Segment Overview Revenue $251.3M Industrial Automation INDUSTRIAL Cybersecurity SOLUTIONS EBITDA Margin 14.1% Revenue $212.2M Smart Buildings ENTERPRISE Broadband & 5G SOLUTIONS EBITDA Margin 11.6% Adjusted results. See Appendix for reconciliation to comparable GAAP results. Q1 2020 Earnings
Slide 11: Q1 2020 Financial Summary
Q1 2020 Financial Summary Q1 2020 Q4 2019 Q1 2019 Revenue 463.5M $549.7M $500.1M Gross profit $170.9M $205.5M $186.9M Gross profit percentage 36.9% 37.4% 37.4% EBITDA $60.8M $92.9M $76.4M EBITDA percentage 13.1% 16.9% 15.3% Net Income(1) $30.5M $54.9M $42.0M Earnings Per Share(2) $0.67 $1.20 $0.84 A
Slide 12: Q1 2020 Segment Results
Q1 2020 Segment Results Industrial Enterprise Consolidated Solutions Solutions Q1 2020 Revenue $251.3M $212.2M $463.5M EBITDA(1) $35.5M $24.7M $60.2M EBITDA Margin 14.1% 11.6% 13.0% Q4 2019 Revenue $303.3M $246.4M $549.7M EBITDA(1) $60.9M $33.9M $94.7M EBITDA Margin 20.1% 13.7% 17.2% Q1 2019 Revenue
Slide 13: Q1 2020 Balance Sheet Highlights
Q1 2020 Balance Sheet Highlights Q1 2020 Q4 2019 Q1 2019 Cash and Cash Equivalents(1) $294M $426M $339M Working Capital Turns 6.8x 13.0x 5.7x Days Sales Outstanding 59 57 53 Inventory Turns 4.6x 6.0x 4.5x PP&E Turns 5.5x 6.4x 6.3x Total Debt Principal Amount $1.40B $1.46B $1.49B Net Leverage(2) 2.8x
Slide 14: A Quality Balance Sheet Provides Significant Flexibility
A Quality Balance Sheet Provides Significant Flexibility Fixed, long-term maturities Euro-denominated debt Pre-tax cost of debt = 3.5% $M $600 $500 NO NEAR-TERM MATURITIES $486 $400 $378 $300 $324 $200 NO MAINTENANCE COVENANTS $216 $100 $0 2020 2021 2022 2023 2024 2025 2026 2027 2028 Strong balance
Slide 15: Q1 2020 Cash Flow Highlights
Q1 2020 Cash Flow Highlights TTM Full Year Q1 2020 Q1 2019 Q1 2020 2019 Cash flows from operating activities ($52.1M) ($46.1M) $270.9M $276.9M Less: Net capital expenditures(1) $18.8M 23.6M $105.2M $110.0M Free cash flow(2) ($70.9M) ($69.6M) $165.7M $166.9M Dividends / Share Repurchases $23.5M $10.7
Slide 16: Questions?
QUESTIONS? Q1 2020 Earnings Release |
Slide 17: Appendix
APPENDIX Q1 2020 Earnings Release |
Slide 18: Statement of Operations
Statement of Operations Three Months Ended March 29, 2020 March 31, 2019 (In thousands, except per share data) Revenues $ 463,526 $ 500,140 Cost of sales (293,025) (313,284) Gross profit 170,501 186,856 Selling, general and administrative expenses (98,389) (97,955) Research and development expenses
Slide 19: Operating Segment Information
Operating Segment Information Enterprise Solutions Industrial Solutions Total Segments (In thousands, except percentages) For the three months ended March 29, 2020 Segment Revenues $ 212,213 $ 251,313 $ 463,526 Segment EBITDA 24,712 35,527 60,239 Segment EBITDA margin 11.6 % 14.1 % 13.0 % Depreciati
Slide 20: Operating Segment Reconciliation to Consolidated Results
Operating Segment Reconciliation to Consolidated Results Three Months Ended March 29, 2020 March 31, 2019 (In thousands) Total Segment Revenues $ 463,526 $ 500,140 Deferred revenue adjustments — — Consolidated Revenues $ 463,526 $ 500,140 Total Segment EBITDA $ 60,239 $ 76,299 Eliminations (95) (483
Slide 21: Balance Sheet
Balance Sheet March 29, 2020 December 31, 2019 (Unaudited) (In thousands) ASSETS Current assets: Cash and cash equivalents $ 250,993 $ 407,480 Receivables, net 307,064 334,634 Inventories, net 252,921 231,333 Other current assets 31,781 29,172 Current assets of discontinued operations 344,212 375,13
Slide 22: Cash Flow Statement
Cash Flow Statement Three Months Ended March 29, 2020 March 31, 2019 (In thousands) Cash flows from operating activities: Net income (loss) $ (11,219) $ 25,178 Adjustments to reconcile net income (loss) to net cash used for operating activities: Depreciation and amortization 26,798 37,001 Asset impa
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Three Months Ended In addition to reporting financial results in accordance with accounting principles generally accepted in the United States, we provide non-GAAP operating results March 29, 2020 March 31, 2019 adjusted for certain items, including: asset impairm
Slide 24: Reconciliation of Non-GAAP Measures (continued)
Reconciliation of Non-GAAP Measures (continued) In addition to reporting financial results in accordance with accounting principles Three Months Ended generally accepted in the United States, we provide non-GAAP operating results adjusted for certain items, including: asset impairments; accelerated
Slide 25: Free Cash Flow GAAP to Non-GAAP Reconciliation
Free Cash Flow GAAP to Non-GAAP Reconciliation Three Months Ended March 29, 2020 March 31, 2019 (In thousands) GAAP net cash used for operating activities $ (52,052) $ (46,060) Capital expenditures, net of proceeds from the disposal of tangible assets (18,845) (23,585) Non-GAAP free cash flow $ (70,