Slide 1: First Quarter 2017 Results
First Quarter 2017 Results Eddie Edwards President and Chief Executive Officer Mark Olson Executive Vice President and Chief Financial Officer Version 17.2
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 forward-looking statemen
Slide 3: Agenda
Agenda • First quarter 2017 highlights • First quarter 2017 results • Segment review • Cash flow and capital structure • Second quarter and full year 2017 outlook 3 3
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS Revenue down slightly YOY • Double-digit U.S. growth • EMEA growth • Offset by declines in other regions Gross Margin of 40% • Up ~90 basis points YOY Adjusted Operating Margin(1) of 19% • Up ~60 basis points YOY GAAP EPS of $0.17 • More than doubled Adjusted EPS(1) of $0.52 • U
Slide 5: Q1 2017 Results
Q1 2017 RESULTS U.S. revenue growth, cost reduction initiatives and favorable geographic mix drove bottom-line Revenue Operating Income Diluted Earnings Per Share (in millions) (in millions) $1,144 $1,179 $1,137 $252 Adjusted(1) $211 $217 $0.61 Adjusted(1) $0.48 $0.52 $91 $119 $121 GAAP $0.28 $0.17
Slide 6: CommScope Connectivity Solutions (CCS)
COMMSCOPE CONNECTIVITY SOLUTIONS (CCS) U.S. and EMEA FTTX growth offset by Indoor Network Solutions Revenue Operating Income (in millions) (in millions) $687 $681 $682 Adjusted(1) $135 $140 $115 Q1 2017 Adjusted GAAP Down 1% YOY Operating Margin(1) $50 $43 $48 of 16.9% Q1 2016 Q4 2016 Q1 2017 Q1 201
Slide 7: CommScope Mobility Solutions (CMS)
COMMSCOPE MOBILTY SOLUTIONS (CMS) Double-digit NAR and single-digit EMEA growth offset by other regions Revenue Operating Income (in millions) (in millions) $113 $498 Adjusted(1) $102 $457 $456 Q1 2017 Adjusted $77 Relatively Flat Operating Margin(1) $76 of 22.4% $74 YOY GAAP Up ~550 bps $41 YOY Q1
Slide 8: Cash Flow and Capital Structure
CASH FLOW AND CAPITAL STRUCTURE Repurchased 1.6 million shares during March Replaced $750 million secured debt with longer tenor, unsecured debt Cash Flow Highlights Major Debt Maturities as of March 31, 2017 Q1 Q1 (in millions, except ratio) (in millions) 2016(1) 2017 LTM Adjusted EBITDA: $1,138 Ca
Slide 9: Outlook
OUTLOOK(1) Q2 2017 Guidance Full Year 2017 Outlook • Sales of $1.2 billion - $1.25 billion • Sales of $4.85 billion - $4.95 billion • Operating income of $145 million - $160 million • Operating income of $670 million - $700 million • Adjusted operating income of $245 million - $265 million • Adjuste
Slide 10: 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 11: Income Statements
Income Statements (Unaudited -- In thousands, Thre e Months Ende d except per share amounts) March 31, 2017 2016 Net sales $ 1,137,285 $ 1,143,979 Operating costs and expenses: Cost of sales 682,459 696,888 Selling, general and administrative 211,554 209,197 Research and development 48,895 52,190 Am
Slide 12: Balance Sheets
Balance Sheets March 31, 2017 De ce mbe r 31, 2016 Assets (Unaudited -- In thousands) Cash and cash equivalents $ 437,637 $ 428,228 Accounts receivable, less allowance for doubtful accounts of $18,103 and $17,211, respectively 941,274 952,367 Inventories, net 498,087 473,267 Prepaid expenses and oth
Slide 13: Statements of Cash Flows
Statements of Cash Flows Thre e Months Ende d March 31, 2017 2016 (Unaudited -- In thousands) Operating Activities: Net income $ 33,562 $ 12,580 Adjustments to reconcile net income to net cash generated by operating activities: Depreciation and amortization 100,401 96,938 Equity-based compensation 9
Slide 14: Sales by Region
Sales by Region (Unaudited -- In millions) % Change Q1 2017 Q1 2016 YOY United States $ 648.3 $ 588.8 10.1 % Europe, Middle East and Africa 231.8 218.3 6.2 Asia Pacific 181.9 240.7 (24.4) Central and Latin America 58.8 66.3 (11.3) Canada 16.5 29.9 (44.8) Total Net Sales $ 1,137.3 $ 1,144.0 (0.6) % 1
Slide 15: Segment Information
Segment Information (Unaudited -- In millions) Sales by Segment % Change Q1 2017 Q4 2016 Q1 2016 S equential YOY Connectivity Solutions $ 681.6 $ 681.3 $ 687.0 — % (0.8) % Mobility Solutions 455.7 497.6 457.0 (8.4) % (0.3) % Total Net Sales $ 1,137.3 $ 1,178.9 $ 1,144.0 (3.5) % (0.6) % Non-GAAP Adju
Slide 16: Adjusted Operating Income Reconciliation by Quarter
Adjusted Operating Income Reconciliation by Quarter (Unaudited -- In millions) Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Operating income, as reported $ 121.4 $ 119.4 $ 180.7 $ 183.9 $ 90.7 Amortization of purchased intangible assets 67.6 72.9 74.6 76.0 73.6 Restructuring costs, net 5.4 18.4 10.8 7.6
Slide 17: Quarterly Adjusted Operating Income Reconciliation by Segment
Quarterly Adjusted Operating Income Reconciliation by Segment First Quarter 2017 Non-GAAP Adjusted Operating Income Reconciliation by Segment (Unaudited -- In millions) Connectivity Mobility S olutions S olutions Total Operating income, as reported $ 47.8 $ 73.6 $ 121.4 Amortization of purchased int
Slide 18: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation (Unaudited – In millions) Three Months Ended March 31, 2017 2016 Operating income, as reported $ 121.4 $ 90.7 Adjustments: Amortization of purchased intangible assets 67.6 73.6 Restructuring costs, net 5.4 6.1 Equity-based compensation 9.4 8.8 Asset impairments — 1
Slide 19: Outlook GAAP to Non-GAAP Reconciliation
Outlook GAAP to Non-GAAP Reconciliation Outlook (Unaudited -- In millions) Three Months Ended June 30, Full Year 2017 2017 Operating income $145 - $160 $670 - $700 Adjustments: Amortization of purchased intangible assets $70 $270 Equity-based compensation $10 $45 Restructuring costs, integration cos