Vistance Networks, Inc. · NASDAQ:VISN
Vistance Networks — Q1 2019 Earnings Presentation
31 slides from Vistance Networks's earnings presentation, May 9, 2019
Slide 1: First Quarter 2019 Results
First Quarter 2019 Results May 9, 2019 Eddie Edwards Alex Pease President & CEO EVP & CFO
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 statements may discuss g
Slide 3: Agenda
Agenda Quarterly Overview CommScope 1Q’19 Earnings • Quarterly Performance • Segment Review ARRIS 1Q’19 Earnings • Quarterly Performance • Segment Review Cash Flow and Capital Structure CommScope + ARRIS Integration 2Q’19 Guidance and Full Year Outlook Summary 3 © 2019 CommScope, Inc. All rights res
Slide 4: Quarterly Overview
Quarterly Overview (all comparisons are year over year) • Sales of $1.10B decreased 1.9% • Orders were $1.13B resulting in a book-to-bill ratio of 1.03x 1Q’19 • CCS sales decreased 4.1% to $646M, while CMS sales increased 1.5% to $453M Financial • Non-GAAP Adjusted operating income(1) increased 1.1%
Slide 5: CommScope 1Q'19 Financial Results
CommScope 1Q’19 Financial Results Net Sales ($M) Adj. Operating Income(1) ($M) Adj. EBITDA(1) ($M) Adj. EPS(1) -2% +1% Flat -2% $191 $208 $208 $0.49 $1,121 $189 $0.48 $1,100 1Q'18 1Q'19 1Q'18 1Q'19 1Q'18 1Q'19 1Q'18 1Q'19 (1) See appendix for reconciliation of non-GAAP adjusted measures. • Excluding
Slide 6: CommScope Segment 1Q'19 Financial Results
CommScope Segment 1Q’19 Financial Results COMMSCOPE CONNECTIVIT Y SOLUTIONS (CCS) COMMSCOPE MOBILITY SOLUTIONS (CMS) Net Sales ($M) Adj. Operating Income(1) ($M) Net Sales ($M) Adj. Operating Income(1) ($M) -4% -12% +1% +19% $109 $447 $453 $95 $674 $646 $96 $80 1Q'18 1Q'19 1Q'18 1Q'19 1Q'18 1Q'19 1Q
Slide 7: ARRIS 1Q'19 Financial Results
ARRIS 1Q’19 Financial Results Net Sales ($M) Adj. Operating Income(1) ($M) Adj. EBITDA(1) ($M) -12% -64% -59% $1,578 $209 $186 $1,381 $86 $67 1Q'18 1Q'19 1Q'18 1Q'19 1Q'18 1Q'19 (1) See appendix for reconciliation of non-GAAP adjusted measures. • Lower shipments of I-CCAP E6000 • Adjusted operating
Slide 8: ARRIS Segment 1Q'19 Financial Results
ARRIS Segment 1Q’19 Financial Results CPE N&C Enterprise Net Sales ($M) AOI(1) ($M) Net Sales ($M) AOI(1) ($M) Net Sales ($M) AOI(1) ($M) -6% +57% -18% -53% -29% -286% $875 $29 $824 $538 $164 $440 $18 $18 $150 $117 $71 $(33) 1Q'18 1Q'19 1Q'18 1Q'19 1Q'18 1Q'19 1Q'18 1Q'19 1Q'18 1Q'19 1Q'18 1Q'19 (1)
Slide 9: CommScope First Quarter Cash Flow Update
CommScope First Quarter Cash Flow Update Cash Flow from Operations ($M) Adj. Free Cash Flow(1) ($M) $427 $449 $38 $35 $2 1Q’18 1Q’19 1Q’19 TTM ($10) 1Q’18 1Q’19 1Q’19 TTM (1) See appendix for reconciliation of non-GAAP adjusted measures. 9 © 2019 CommScope, Inc. All rights reserved. CommScope, ARRIS
Slide 10: Capital Structure Update
Capital Structure Update OVERVIEW CommScope (As of 3/31/19) ARRIS Acquisition Funding ABL Total Debt $7,560M $1,900 $1,750 Fixed $1,500 $1,500 • $3.2B 7-year secured term loan (L+325/99) Floating • $1.25B 5-yr senior secured notes @ 5.5% $550 $650 • $1.50B 7-yr senior secured notes @ 6.0% $261 • $1.
Slide 11: Integrating ARRIS and Excited for Combined Company Opportunity
Integrating ARRIS and Excited for Combined Company Opportunity W E A R E CO M M I T T E D TO D E L I V E R I N G O N O U R M & A CO M M I T M E N T S First Full Year Expectations • First weeks of integration proceeding on plan • 30%+ Adjusted EPS(1) accretion • Integration teams executing against th
Slide 12: Powering the Present. Empowering the Future.
POWERING THE PRESENT. EMPOWERING THE FUTURE. STRONGER INNOVATE FASTER SMALL CELL | INTEGRATED ACCESS WIRELESS | ENTERPRISE WIRED & WIRELESS | PRIVATE NETWORKS MANAGED SERVICES | VIDEO CONNECTED HOME COMBINING EXPERTISE AND EXPERIENCE IN BROADBAND, WIRELESS AND VIDEO HELPING CUSTOMERS OPTIMIZE PERFOR
Slide 13: 2Q'19 Guidance
2Q’19 Guidance Combined Company Guidance Sales $2.490 billion – $2.650 billion Non-GAAP Adj. EBITDA $365M - $405M Non-GAAP Adj. Effective Tax Rate 27% - 29% Weighted Average Diluted Shares 231M Non-GAAP EPS $0.54 - $0.62 Note: See appendix for reconciliation of non-GAAP adjusted measures; components
Slide 14: Full Year Business Outlook
Full Year Business Outlook COMMSCOPE ARRIS Densification of 4G networks in preparation for 5G at the metrocell layer Subdued cable capex; expected to improve as the year progresses Continuation of FirstNet deployment and investment in access layer CPE manufacturing on track to be fully out o
Slide 15: Summary
SUMMARY 2019 is a Confident in 2020 will be a Expected cash Excited about the transformative ability to execute stronger year due flow from ARRIS acquisition year for despite challen- to Ruckus, 5G, operations(1) of and the numerous CommScope ging start to year, Cloud Data ~$1B in first full opportu
Slide 16: Thank You
COMMSCOPE’ Thank You
Slide 17: Appendix
COMMSCOPE’ Appendix
Slide 18: Non-GAAP Financial Measures
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 not a subst
Slide 19: Statements of Operations
Statements of Operations CommScope Holding Company, Inc. Condensed Consolidated Statements of Operations (Unaudited -- In millions, except per share amounts) Thre e Months Ende d March 31, 2019 2018 Net sales $ 1,099.5 $ 1,120.5 Cost of sales 687.7 709.1 Gross profit 411.8 411.4 Operating costs and
Slide 20: Balance Sheets
Balance Sheets CommScope Holding Company, Inc. Condensed Consolidated Balance Sheets (Unaudited -- In millions, except share amounts) March 31, 2019 De ce mbe r 31, 2018 Assets Cash and cash equivalents $ 176.4 $ 458.2 Accounts receivable, less allowance for doubtful accounts of $19.5 and $17.4, res
Slide 21: Statements of Cash Flows
Statements of Cash Flows CommScope Holding Company, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited -- In millions) Thre e Months Ende d March 31, 2019 2018 Operating Activities: Net income (loss) $ (2.3) $ 33.7 Adjustments to reconcile net income to net cash generated by (used in) o
Slide 22: Sales by Region
Sales by Region % Change Q1 2019 Q1 2018 YOY United States $ 639.1 $ 607.5 5.2 % Europe, Middle East and Africa 229.9 249.7 (7.9) Asia Pacific 147.2 188.6 (22.0) Caribbean and Latin America 63.5 56.1 13.2 Canada 19.8 18.6 6.5 Total net sales $ 1,099.5 $ 1,120.5 (1.9) % 22 © © 2019 2019CommScope, Com
Slide 23: Segment Information
Segment Information Sales by Segment % Change Q1 2019 Q4 2018 Q1 2018 S equential YOY Connectivity Solutions $ 646.1 $ 666.9 $ 673.6 (3.1) % (4.1) % Mobility Solutions 453.4 390.8 446.9 16.0 % 1.5 % Total net sales $ 1,099.5 $ 1,057.7 $ 1,120.5 4.0 % (1.9) % Non-GAAP Adjusted EBITDA by Segment % Cha
Slide 24: Adj. Free Cash Flow
Adj. Free Cash Flow Q1 2019 Q1 2018 Cash flow from operations $ (10.0) $ 35.3 Integration and transaction costs 7.3 0.6 Restructuring costs 25.9 15.2 Capital expenditures (21.4) (13.6) Adjusted free cash flow $ 1.8 $ 37.5 See Description of Non-GAAP Financial Measures 24 © © 2019 2019CommScope, Comm
Slide 25: Reconciliation by Quarter
Adj. Operating Income and Adj. EBITDA Reconciliation by Quarter Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 Operating income, as reported $ 90.7 $ 49.3 $ 132.2 $ 164.7 $ 103.7 Amortization of purchased intangible assets 59.3 65.1 65.8 66.4 67.2 Restructuring costs, net 12.4 24.3 7.1 7.2 5.5 Equity-based
Slide 26: Adj. EBITDA Reconciliation by Segment
Quarterly First Quarter 2019 Non-GAAP Adjusted EBITDA Reconciliation by Segment Adj. EBITDA Connectivity Mobility S olutions S olutions Total Operating income, as reported $ 29.9 $ 60.7 $ 90.7 Amortization of purchased intangible assets 41.0 18.3 59.3 Reconciliation Restructuring costs, net 7.4 5.1
Slide 27: Adj. Net Income Reconciliation
Adj. Net Income Reconciliation Three Months Ended March 31, 2019 2018 Operating income, as reported $ 90.7 $ 103.7 Adjustments: Amortization of purchased intangible assets 59.3 67.2 Restructuring costs, net 12.4 5.5 Equity-based compensation 7.5 10.5 Integration and transaction costs 20.8 1.6 Total
Slide 28: Outlook GAAP to Non-GAAP Reconciliation
Outlook GAAP to Non-GAAP Reconciliation Outlook Three Months Ended June 30, 2019 Operating loss $(128) - $(170) Adjustments: Amortization of purchased intangible assets $160 - $180 Restructuring costs, integration and transaction costs and other (1) $150 - $175 Purchase accounting $125 - $150 Equity
Slide 29: ARRIS Quarterly Net Sales, Operating Income and Adj. EBITDA by Segment
ARRIS Quarterly Net Sales, GAAP Operating Income (Loss), Non-GAAP Adj. Operating Income and Non-GAAP Adj. EBITDA by Segment Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 CPE $ 824.2 $ 1,099.0 $ 941.5 $ 1,008.1 $ 875.2 N&C 440.2 536.8 532.0 549.5 538.3 Enterprise 116.9 151.3 177.8 168.9 164.2 ARRIS net sal
Slide 30: ARRIS Reconciliation of GAAP to Non-GAAP Adj. EBITDA by Segment
ARRIS First Quarter 2019 Non-GAAP Adjusted EBITDA Reconciliation by Segment (1) Reconciliation of CPE N&C Enterprise Total Operating income (loss) $ (23.8) $ 32.4 $ (54.5) $ (45.9) Amortization of purchased intangible assets 43.7 22.7 15.6 82.0 GAAP to Non- Restructuring costs, net 0.5 0.1 (0.1) 0.5
Slide 31: ARRIS Reconciliation of GAAP to Non-GAAP Adj. EBITDA by Segment
ARRIS Reconciliation Second Quarter 2018 Non-GAAP Adjusted EBITDA Reconciliation by Segment (1) of GAAP to CPE N&C Enterprise Total Non-GAAP Adj. Operating income (loss) $ (19.4) $ 75.6 $ (12.3) $ 43.9 Amortization of purchased intangible assets 51.4 24.7 14.3 90.4 Restructuring costs, net 14.6 6.6