Vistance Networks, Inc. · NASDAQ:VISN
Vistance Networks — CommScope Holding Company — Q3 2020 Earnings Presentation
26 slides from Vistance Networks's earnings presentation, Nov 5, 2020
Slide 1: Third Quarter 2020 Results
Third Quarter 2020 Results November 5, 2020 commscope.com | © 2020 CommScope, Inc.
Slide 2: Important information
Important information 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 statements may
Slide 3: CEO quote on growth and profitability
“As we look ahead, the Board and management team are focused on growing our business and creating long-term, profitable growth through a combination of investment opportunities and cost cutting measures. While there remains much to do, we are confident in our ability to deliver enhanced profitabilit
Slide 4: Initial Observations
Initial Observations • Talented and experienced management team • Deep technology expertise • Extensive customer relationships • Best-in-class supply chain • Robust cash flow generation Focused on extending CommScope’s legacy of innovation and industry leadership 3 © 2020 CommScope, Inc.
Slide 5: CTO quote on fundamental networks for communication
“CommScope provides the fundamental networks for communication, bringing people together and enabling more economic activity than at any time in human history. When you see someone using a cell phone, watching TV, or on the internet, you know you’ve helped to make that happen." Morgan Kurk EVP and C
Slide 6: Segment business highlights and portfolio momentum
BROADBAND NETWORKS VENUE AND CAMPUS NETWORKS OUTDOOR WIRELESS NETWORKS HOME NETWORKS Expanding portfolio and RUCKUS Wi-Fi 6 and cloud Active/passive antenna Managing shift to IP deployment of DAA and program gaining interface innovation for streaming platforms with Virtualized platforms momentum 3.5
Slide 7: Key industry trends: 5G, DAA, PON, fiber, Wi-Fi 6E
• 5G spectrum (C-Band / CBRS / 2.5GHz) deployment strategies and key technology decisions • Continued technology evolution of broadband networks including distributed access architectures (DAA), passive optical networks (PON) and the virtualization of network functions • Increasing upstream frequenc
Slide 8: CFO quote on macroeconomic uncertainty
“While we continue to expect that the current macroeconomic uncertainty will persist in the near-term, we are focused on balancing actions to improve our financial performance and flexibility, while also investing in our future.” Alex Pease EVP and Chief Financial Officer 7 © 2020 CommScope, Inc.
Slide 9: Strong execution delivers better than expected adjusted EBITDA and adjusted EPS
(In $millions, except per share amounts) 2Q’20 3Q’20 Q/Q Results vs. Outlook Results Results Change Net Sales (1) $2,103 $2,168 +3% In-line Adj. EBITDA(2) $280 $342 +22% Significant outperformance Adj. EPS(2) $0.32 $0.51 +59% Adj. Free Cash Flow(2) $217 $176 -19% N/A Strong execution delivers better
Slide 10: Broadband Networks
Broadband Networks Financial Highlights Business Business Highlights Highlights Net Sales (1) ($M) • Sequential growth in all geographic regions led • Operator demand continued to increase through the by North America quarter driven by plant upgrades to support increased 3Q'19 $695 • Sequential grow
Slide 11: Venue and Campus Networks
Venue and Campus Networks Financial Highlights Business Highlights • Enterprise copper and fiber infrastructure down YoY in North Net Sales (1) ($M) • Sequential growth led primarily by Europe, North America and China America due to COVID-related construction delays, partially 3Q'19 $525 offset by A
Slide 12: Outdoor Wireless Networks
Outdoor Wireless Networks Financial Highlights Business Highlights • Sequential decline primarily in North America • 5G investments continuing in EU; participating in Net Sales ($M) and Middle East and Africa, partially offset by discussions with several operators on their network 3Q'19 growth in Ce
Slide 13: Home Networks
Home Networks Financial Highlights Business Highlights Net Sales (1) ($M) • Sequential decline primarily driven by North • Home Media Solutions (Video CPE) remains soft primarily due America, partially offset by growth in Europe and to continuing OTT trends, COVID-19 constraining video 3Q'19 $826 Ce
Slide 14: Generated significant free cash flow
Generated significant free cash flow GAAP Cash Flow from Operations (1)($M) Adj. Free Cash Flow(1) (2)($M) $675 $673 $336 $209 $323 $217 $172 $176 $(43) $(43) 4Q’19 1Q’20 2Q’20 3Q’20 TTM 4Q’19 1Q’20 2Q’20 3Q’20 TTM • Strong cash flow from operations and adjusted free cash flow; above expectations •
Slide 15: Strong liquidity & de-risked capital structure
Strong liquidity & de-risked capital structure Debt Maturities (as of 9/30/2020) Proactive balance sheet management provides long runway before next significant debt maturities • Since close of Arris acquisition, CommScope has repaid over $800 Secured Debt Unsecured Debt million of debt with focus o
Slide 16: Q&A Third Quarter 2020 Results
Q&A Third Quarter 2020 Results now meets next commscope.com | © 2020 CommScope, Inc.
Slide 17: Appendix
COMMSCOPE’ Appendix
Slide 18: Statement of operations
CommScope Holding Company, Inc. Condensed Consolidated Statements of Operations (Unaudited -- In millions, except per share amounts) Statement of Three Months Ended 2020 September 30, 2019 Nine Months Ended 2020 September 30, 2019 operations Net sales Cost of sales Gross profit $ 2,168.1 1,432.6 735
Slide 19: Balance sheet
CommScope Holding Company, Inc. Condensed Consolidated Balance Sheets (In millions, except share amounts) Unaudited Balance sheet Cash and cash equivalents Assets Accounts receivable, less allowance for doubtful accounts of $ September 30, 2020 582.8 $ December 31, 2019 598.2 $43.1 and $35.4, respec
Slide 20: Statement of cash flows
CommScope Holding Company, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited -- In millions) Three Months Ended Nine Months Ended Statement of cash Operating Activities: September 30, 2020 2019 September 30, 2020 2019 flows Net loss Adjustments to reconcile net loss to net cash generat
Slide 21: Adjusted EBITDA and net income reconciliation
CommScope Holding Company, Inc. Reconciliation of GAAP Measures to Non-GAAP Adjusted Measures (Unaudited -- In millions, except per share amounts) Three Months Three Months Nine Months Ended Ended Ended Adjusted EBITDA and June 30, September 30, September 30, 2020 2020 2019 2020 2019 Net loss, as re
Slide 22: Sales by region
Sales by region CommScope Holding Company, Inc. Sales by Region (Unaudited -- In millions) Sales by Region % Change % Change Q3 2020 Q2 2020 Q3 2019 Sequential YOY United States $ 1,318.2 $ 1,353.6 $ 1,432.7 (2.6) % (8.0) % Europe, Middle East and Africa 407.3 359.0 423.1 13.5 (3.7) Asia Pacific 219
Slide 23: Sales and adjusted EBITDA by segment
CommScope Holding Company, Inc. Sales and adjusted Segment Information (Unaudited -- In millions) EBITDA by segment Sales by Segment (1) % Change % Change Q3 2020 Q2 2020 Q3 2019 Sequential YOY Broadband $ 820.9 $ 671.9 $ 694.8 22.2 % 18.1 % Home 563.6 624.0 826.4 (9.7) (31.8) Outdoor Wireless 271.8
Slide 24: Adjusted EBITDA reconciliation by segment
CommScope Holding Company, Inc. Reconciliation of GAAP to Segment Adjusted EBITDA (Unaudited -- In millions) Third Quarter 2020 Segment Adjusted EBITDA Reconciliation (1) Adjusted EBITDA Outdoor Venue and Broadband Home Wireless Campus Total Operating income (loss), as reported $ 76.7 $ (3.7) $ 26.0
Slide 25: Adjusted free cash flow reconciliation
Adjusted free cash flow reconciliation CommScope Holding Company, Inc. Adjusted Free Cash Flow (Unaudited -- In millions) Adjusted Free Cash Flow Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Cash flow from operations $ 522.1 $ 336.0 $ (42.7) $ 209.1 $ 172.2 Capital expenditures (24.3) (31.8) (23.9) (23.8
Slide 26: Adjusted gross profit and adjusted operating expense
CommScope Holding Company, Inc. Adjusted gross profit Quarterly Adjusted Gross Profit and Adjusted Operating Expense (Unaudited -- In millions) and adjusted operating GAAP to Non-GAAP Adjusted Gross Profit expense Gross profit, as reported Q3 2019 Q4 2019 Q1 2020 Q2 2020 $ 609.9 $ 736.2 $ 641.2 $ 65
CommScope Holding Company — Q3 2020 Earnings Presentation on 6ix