Vistance Networks, Inc. · NASDAQ:VISN
Vistance Networks — CommScope Holding Company — Q2 2020 Earnings Presentation
30 slides from Vistance Networks's earnings presentation, Aug 6, 2020
Slide 1: Second Quarter 2020 Results
Second Quarter 2020 Results August 6, 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 network connectivity
“The network connectivity we provide to our customers and business partners has never been more essential." Eddie Edwards President and Chief Executive Officer 2 © 2020 CommScope, Inc.
Slide 4: Second quarter performance better than expected
(In $millions, except per share amounts) 1Q’20 2Q’20 Q/Q Results vs. Outlook Results Results Change Net Sales (1) 2,033 2,103 +3% Outperformance Adj. EBITDA(2) 231 280 +21% Significant outperformance Adj. EPS(2) $0.12 $0.32 +167% (43) 217 NM Significant Adj. Free Cash Flow(2) outperformance NM - Not
Slide 5: Broadband segment sales grew nearly 10% sequentially
• Broadband segment sales grew nearly 10% sequentially as service providers increase network investments to maintain network capacity • Venue & Campus segment sales remain impacted by soft enterprise demand, however sales improved sequentially and are expected to improve in the second half of the ye
Slide 6: Operating segment updates
Operating segment updates Venue and Campus Networks Broadband Networks • General construction delays due to COVID-19 • Momentum increased led by strong cable operator related site access restrictions; project demand cancellations have been limited • Significant increase in backlog of outside plant •
Slide 7: Operating segment updates
Operating segment updates Home Networks Outdoor Wireless Networks • Home Media Solutions (Video CPE) remains • 5G investments continuing in EU; some countries soft primarily due to continuing OTT trends still finalizing their spectrum auctions/allocations and COVID-19 constraining video activations
Slide 8: Global responsiveness and resilience
• CommScope’s 20 manufacturing facilities worldwide Global have safely resumed normal operations responsiveness • Our global supply chain experience, coupled with our manufacturing base, enable us to flex production as and resilience situations change • Our broad portfolio of solutions and services
Slide 9: Financial Review & Outlook
Financial Review & Outlook “While market conditions remain dynamic, we are focused on controlling what we can control, strengthening our liquidity position and improving our cost structure.” Alex Pease EVP and CFO 8 © 2020 CommScope, Inc.
Slide 10: CommScope 2Q'20 financial results
CommScope 2Q’20 financial results Net Sales(1) ($M) Adj. EBITDA(2) ($M) Adj. EPS(2) Q-Q% Change: +3% Q-Q% Change: +21% Q-Q% Change: +167% Y-Y% Change: -19% Y-Y% Change: -27% Y-Y% Change: -52% $2,595 $396 $381 $2,103 $0.66 $2,567 $2,033 $280 $280 $231 $0.32 $2,033 $2,103 $231 $0.12 2Q'19 1Q'20 2Q'20
Slide 11: Reducing costs in response to the current environment
Reducing costs in response to the current environment As the COVID-19 pandemic began to unfold we reacted …and we now expect to exit the year at a $450 million quickly and we consistently lowered our 2020 operating quarterly run-rate. expense expectations… Full-Year Adj. Operating Expenses ($M) (1)
Slide 12: Segment 2Q'20 financial results
Segment 2Q’20 financial results Venue and Campus Networks Outdoor Wireless Networks Net Sales (1) ($M) • Sequential growth led by China, Asia-Pacific and Net Sales ($M) • Sequential decline primarily in North America North America, partially offset by declines in and Middle East and Africa, partiall
Slide 13: Segment 2Q'20 financial results
Segment 2Q’20 financial results Broadband Networks Home Networks Net Sales (1) ($M) • Sequential growth led by North America and Net Sales (1) ($M) • Sequential growth led by North America, Asia-Pacific, partially offset by declines in Central partially offset by declines in Central and Latin (3) an
Slide 14: Cash flow update
Cash flow update GAAP Cash Flow from Operations (1)($M) Adj. Free Cash Flow(1) (2)($M) $522 $535 $336 $323 $209 $217 $(43) $(43) 3Q’19 4Q’19 1Q’20 2Q’20 3Q’19 4Q’19 1Q’20 2Q’20 • Strong cash flow from operations and adjusted free cash flow; well-above expectations • Operating expense controls and sa
Slide 15: Strong liquidity & de-risked capital structure
Strong liquidity & de-risked capital structure 6/30/20 Debt Maturities & Refinancing Plan $700 million debt refinancing completed in July 2020 Refinanced Debt • Redeemed $50 million of 2021 Notes and $650 million of 2024 Notes 5.00% Notes due 2021 (par call) 5.50% Notes due 2024 (101.833 call) • Iss
Slide 16: Confident in ability to navigate current market headwinds
FISCAL 2020 OUTLOOK Confident in ability to navigate current market headwinds Demand Market Key Near-Term Business Drivers Outlook Broadband Network upgrades to Rural fiber deployments Operators balancing investment relieve stress due to WFH, fueled by tier 2/3 operators Networks with internal cash
Slide 17: 2H'20 Outlook
2H’20 OUTLOOK Broadband Networks Venue and Campus Networks 3Q Outlook 3Q Outlook • Upper-teens % sequential sales growth • Mid-single digit % sequential sales growth • Growth in Network Cable & Connectivity and • Growth in indoor fiber, RUCKUS and indoor copper Other FY’20 Assumptions Network & Clou
Slide 18: Closing Remarks
Closing Remarks “Our talented employees quickly adapted to new ways of working, managed the global supply chain dynamically to mitigate the impacts of pandemic related disruptions and remain committed to building a stronger foundation for the future.” Eddie Edwards President and Chief Executive Offi
Slide 19: Closing remarks summary
• Efficient cost structure focused on reshaping and transforming our business • Strong cash flow enables plans to resume debt paydown • We are driven to deliver lasting connectivity, keeping people and things connected • Maintaining our culture and keeping our employees safe continues to be a priori
Slide 20: Q&A Second Quarter 2020 Results
Q&A Second Quarter 2020 Results now meets next commscope.com | © 2020 CommScope, Inc.
Slide 21: Appendix
COMMSCOPE’ Appendix
Slide 22: Statement of Operations
CommScope Holding Company, Inc. Condensed Consolidated Statements of Operations (Unaudited -- In millions, except per share amounts) Three Months Ended Six Months Ended Statement of 2020 June 30, 2019 2020 June 30, 2019 Operations Net sales $ 2,102.8 $ 2,566.7 $ 4,136.0 $ 3,666.3 Cost of sales 1,446
Slide 23: Balance Sheet
CommScope Holding Company, Inc. Condensed Consolidated Balance Sheets (In millions, except share amounts) Unaudited June 30, 2020 December 31, 2019 Balance Sheet Cash and cash equivalents Assets Accounts receivable, less allowance for doubtful accounts of $ 823.4 $ 598.2 $43.4 and $35.4, respectivel
Slide 24: Statement of Cash Flows
CommScope Holding Company, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited -- In millions) Three Months Ended Six Months Ended Statement of Cash Operating Activities: 2020 June 30, 2019 2020 June 30, 2019 Flows Net loss $ (321.1) $ (334.0) $ (481.0) $ (336.3) Adjustments to reconcile
Slide 25: 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 Six Months Ended Ended Ended Adjusted EBITDA and Net loss, as reported $ March 30, 2020 (159.9) 2020 $ (321.1) June 30, 2019 $
Slide 26: Sales by Region
Sales by Region 25 © 2020 CommScope, Inc. All rights reserved. | CommScope, ARRIS and the ARRIS logo are trademarks of CommScope, Inc. and/or its affiliates. All other trademarks are the property of their respective owners.
Slide 27: Sales and Adjusted EBITDA by Segment
Sales and Adjusted CommScope Holding Company, Inc. Segment Information (Unaudited -- In millions) EBITDA by Segment Sales by Segment (1) Combined Company (2) % Change % Change Q2 2020 Q1 2020 Q2 2019 Sequential YOY Broadband $ 671.9 $ 613.4 $ 673.3 9.5 % (0.2) % Home 624.0 601.4 912.4 3.8 % (31.6) %
Slide 28: Adjusted EBITDA Reconciliation by Segment
CommScope Holding Company, Inc. Reconciliation of GAAP to Segment Adjusted EBITDA (Unaudited -- In millions) Second Quarter 2020 Segment Adjusted EBITDA Reconciliation (1) Outdoor Venue and Broadband Home Wireless Campus Total Adjusted EBITDA Operating income (loss), as reported Amortization of purc
Slide 29: 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 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Cash flow from operations $ (251.7) $ 522.1 $ 336.0 $ (42.7) $ 209.1 Capital expenditures (26.6) (24.3) (31.8) (23
Slide 30: 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 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Gross profit, as reported $ 660.0 $ 609.9 $ 73
CommScope Holding Company — Q2 2020 Earnings Presentation on 6ix