Vistance Networks, Inc. · NASDAQ:VISN
Vistance Networks — CommScope Holding Company — Q4 2016 Earnings Presentation
25 slides from Vistance Networks's earnings presentation, Feb 23, 2017
Slide 1: Fourth Quarter 2016 Results
Eddie Edwards Fourth Quarter 2016 Results President and Chief Executive Officer February 23, 2017 Mark Olson Executive Vice President and Chief Financial Officer 1
Slide 2: Safe Harbor
Safe Harbor Caution Regarding Forward Looking Statements During this presentation or any other oral or written statements made by us or on our behalf may include forward-looking statements which reflect our current views with respect to future events and financial performance. These forward-looking
Slide 3: Agenda
Agenda • Fourth quarter and full year 2016 highlights • Fourth quarter 2016 results • Segment review • Cash flow, liquidity and capital structure • First quarter and full year 2017 outlook 3 3
Slide 4: Q4 2016 and FY 2016 Highlights
Q4 2016 Highlights FY 2016 Highlights • Revenue rose 3% YOY driven by NAR • Revenue rose 29% YOY to $4.92 billion due strength (Mobility & FTTX) to the BNS acquisition • Gross Margin of 42% • Gross Margin of 41% • Adjusted Operating Margin(1) of 21%, up ~420 • Adjusted Operating Margin(1) of 21%, up
Slide 5: Q4 2016 Results
Q4 2016 Results Revenue Operating Income Diluted Earnings Per Share (in millions) (in millions) $1,294 $297 $0.81 $1,143 $1,179 $252 $0.61 $196 $181 Adjusted(1) $119 Adjusted(1) $0.42 $0.48 $22 $0.28 $(0.39) GAAP GAAP Q4 2015 Q3 2016 Q4 2016 Q4 2015 Q3 2016 Q4 2016 Q4 2015 Q3 2016 Q4 2016 Sales & Or
Slide 6: CommScope Connectivity Solutions (CCS)
CommScope Connectivity Solutions (CCS) Residential/ Fiber to MDU the Home Outside Revenue Plant (in millions) $819 $672 $681 Actual CATV Headend Fiber Up 1% YOY Backhaul Q4 2015 Q3 2016 Q4 2016 Intelligent Building Operating Income (in millions) Data $189 Center $140 Q4 2016 Adjusted $117 Central Op
Slide 7: CommScope Mobility Solutions (CMS)
CommScope Mobility Solutions (CMS) Additional Offerings Outdoor Cell Site Revenue Cabling & connectivity Filters & combiners (in millions) Services $471 $475 $498 Microwave Metro & Backhaul Actual Small Cell Up Cloud6% YOY RAN Nodes Integrated Cabinet Q4 2015 Q3 2016 Q4 2016 Cloud Operating Income R
Slide 8: Cash Flow and Liquidity
Cash Flow and Liquidity Cash Flow Highlights (in millions) Q4 2015 Q4 2016 CY 2015 CY 2016 Cash flow from operations $ 116 $ 81 $ 302 $ 606 Capital expenditures, net of capital expenditures related to BNS integration(1) (15) (17) (44) (62) Cash paid for transaction & integration costs 25 17 96 65 De
Slide 9: Capital Structure
Capital Structure Capital Summary & Net Leverage Ratio Major Debt Maturities as of December 31, 2016(1) (dollars in millions) 12/31/2016 (in millions) 5.00% and 5.50% Notes $ 1,300.0 Term Loans 1,346.3 6.00% Notes 1,500.0 Secured Notes 500.0 Less: OID & DFF (84.2) Total Debt $ 4,562.0 $1,500 Cash &
Slide 10: Cash Flow and Net Leverage Ratio
Cash Flow and Net Leverage Ratio Cash Flow from Operations Net Leverage Ratio (in millions) BNS Acquisition $606 >$600 5.0x 3.7x ~3x $302 2015 2016 2017 E 2015 2016 2017 E Strong cash flow from operations Net leverage ratio expected to be near 3x by end of 2017, assuming no M&A Reflects $100 million
Slide 11: Outlook: Q1 2017 Guidance
Outlook(1) • Sales of $1.10 billion - $1.15 billion • Operating income of $105 million - $120 million • Adjusted operating income of $205 million - $225 million Q1 2017 • Earnings per diluted share of $0.18 - $0.22, based on 199 million weighted average diluted Guidance shares • Adjusted effective t
Slide 12: Outlook: Full Year 2017
Outlook(1) $5.00B - $5.15B 4% - 5% (1)% - (2)% ~(1)% 2% - 4% Increase $5.0B $4.92B 2016 Organic Revenue Growth FX Impact Product Rationalization 2017E • Sales of $5.00 billion – $5.15 billion • Operating income of $730 million - $770 million Full Year • Adjusted operating income of $1.11 billion - $
Slide 13: 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 14: Full Year 2016 Results
Full Year 2016 Results Diluted Revenue Operating Income Earnings Per Share (in millions) (in millions) $4,978 $4,924 $1,051 Pro forma(1) $2.64 $730 $575 $1.86 Adjusted(2) Adjusted(2) GAAP $3,808 $182 GAAP $1.13 GAAP $(0.37) (3) FY 2015 FY 2016 FY 2015 FY 2016 FY 2015 (3) FY 2016 Sales & Orders: Oper
Slide 15: Connectivity Solutions (CCS) and Mobility Solutions (CMS)
Connectivity Solutions (CCS) and Mobility Solutions (CMS) CCS Revenue CMS Revenue (in millions) (in millions) Pro forma(1) $2,921 $2,966 $2,058 $1,958 Pro forma(1) GAAP $1,966 GAAP $1,842 FY 2015 FY 2016 FY 2015 FY 2016 CCS Operating Income CMS Operating Income (in millions) (in millions) $632 $419
Slide 16: Income Statements
Income Statements Three Months Ended Year Ended (Unaudited -- In thousands, December 31, December 31, except per share amounts) 2016 2015 2016 2015 Net sales $ 1,178,906 $ 1,142,541 $ 4,923,621 $ 3,807,828 Operating costs and expenses: Cost of sales 689,018 743,511 2,890,032 2,462,008 Selling, gener
Slide 17: Balance Sheets
Balance Sheets December 31, (In thousands) 2016 2015 Assets Cash and cash equivalents $ 428,228 $ 562,884 Accounts receivable, less allowance for doubtful accounts of $17,211 and $19,392, respectively 952,367 833,041 Inventories, net 473,267 441,815 Prepaid expenses and other current assets 139,902
Slide 18: Statements of Cash Flows
Statements of Cash Flows Three Months Ended Year Ended December 31, December 31, (Unaudited -- In thousands) 2016 2015 2016 2015 Operating Activities: Net income (loss) $ 54,466 $ (75,147 ) $ 222,838 $ (70,875 ) Adjustments to reconcile net income (loss) to net cash generated by operating activities
Slide 19: Sales by Region
Sales by Region (Unaudited -- In millions) Sales by Region % Change Q4 2016 Q4 2015 YOY North America $ 646.1 $ 571.0 13.2 % Europe, Middle East and Africa 240.1 248.6 (3.4 ) Asia Pacific 224.8 244.5 (8.1 ) Central and Latin America 67.9 78.4 (13.4 ) Total Net Sales $ 1,178.9 $ 1,142.5 3.2 % Sales b
Slide 20: Quarter and Full Year Segment Information
Quarter and Full Year Segment Information Sales by Segment (1) (Unaudited -- In millions) % Change Q4 2016 Q3 2016 Q4 2015 Sequential YOY Connectivity Solutions $ 681.3 $ 819.2 $ 671.5 (16.8 ) % 1.5 % Mobility Solutions 497.6 474.7 471.0 4.8 % 5.6 % Total Net Sales $ 1,178.9 $ 1,293.9 $ 1,142.5 (8.9
Slide 21: Pro Forma Sales
Pro Forma Sales (Unaudited -- In millions) Pro Forma Sales(1) Full Year Q1 2015 Q2 2015 Q3 2015 Q4 2015(2) 2015 Legacy CommScope $ 825.4 $ 867.3 $ 831.5 $ 754.0 $ 3,278.2 Legacy BNS 424.9 471.0 415.8 388.5 1,700.2 Total Pro Forma Net Sales $ 1,250.3 $ 1,338.3 $ 1,247.3 $ 1,142.5 $ 4,978.4 Pro Forma
Slide 22: Adjusted Operating Income Reconciliation by Quarter
Adjusted Operating Income Reconciliation by Quarter (Unaudited -- In millions) Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 Operating income, as reported $ 119.4 $ 180.7 $ 183.9 $ 90.7 $ 21.6 Amortization of purchased intangible assets 72.9 74.6 76.0 73.6 76.9 Restructuring costs, net 18.4 10.8 7.6 6.1 1
Slide 23: Quarterly Adjusted Operating Income Reconciliation by Segment
Quarterly Adjusted Operating Income Reconciliation by Segment Fourth Quarter 2016 Non-GAAP Adjusted Operating Income Reconciliation by Segment (1) (Unaudited -- In millions) Connectivity Mobility Solutions Solutions Total Operating income, as reported $ 43.3 $ 76.1 $ 119.4 Amortization of purchased
Slide 24: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation Three Months Ended Year Ended December 31, December 31, (Unaudited – In millions) 2016 2015 2016 2015 Operating income, as reported $ 119.4 $ 21.6 $ 574.8 $ 181.6 Adjustments: Amortization of purchased intangible assets 72.9 76.9 297.2 220.6 Restructuring costs, ne
Slide 25: Outlook GAAP to Non-GAAP Reconciliation
Outlook GAAP to Non-GAAP Reconciliation Outlook (Unaudited -- In millions) Three Months Ending March 31, Full Year 2017 2017 Operating income $105 - $120 $730 - $770 Adjustments: Amortization of purchased intangible assets $70 $270 Equity-based compensation $10 $45 Restructuring costs, integration c
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