Slide 1: Fourth Quarter and Full Year 2013 Results
Fourth Quarter and Full Year 2013 Results February 20, 2014 Eddie Edwards • President and Chief Executive Officer Mark Olson • Executive Vice President and Chief Financial Officer Confidential
Slide 2: Safe Harbor
Safe Harbor Caution Regarding Forward Looking Statements During this presentation, 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 statements a
Slide 3: Agenda
Agenda • Fourth Quarter and Full Year 2013 Summary • Segment Review • Balance Sheet, Cash Flow and Capital Structure • First Quarter and Full Year 2014 Outlook 3
Slide 4: Q4 2013 Sales & Results
Q4 2013 Sales & Results Sales & Orders: Consolidated Sales (in millions) • Q4 sales of $847m, stable YOY • Wireless growth offset by lower Broadband and $848 $888 $847 Enterprise sales • Growth in EMEA and APAC regions offset by lower sales in North America and Latin America • Orders up 8% YOY to $9
Slide 5: Full Year 2013 Sales & Results
Full Year 2013 Sales & Results Consolidated Sales Sales: (in millions) 5% • Sales up $158m or 5% YOY to $3.5b $3,322 $3,480 • Wireless growth somewhat offset by Broadband and Enterprise • Growth in North America, EMEA and Latin America 2012 2013 Operating Results: Consolidated Adj Op Inc • Record Gr
Slide 6: Wireless Segment
Wireless Segment Global Leader in Wireless RF Infrastructure Solutions Wireless Sales1 Base Station (in millions) Antennas Solutions $516 $553 $534 Integrated and Services Solutions and Products Offering Q4 2012 Q3 2013 Q4 2013 Small Cell DAS Cables and Adjusted Operating Income2 Connectivity (in mi
Slide 7: Enterprise Segment
Enterprise Segment Structured Cabling Connectivity Solutions Data Center Enterprise Sales1 (in millions) Solutions (Redwood Systems & iTRACS) $209 $212 $205 In-Building Cellular Q4 2012 Q3 2013 Q4 2013 Adjusted Operating Income2 (in millions) $44 $42 $32 Commercial Building Q4 2012 Q3 2013 Q4 2013 S
Slide 8: Broadband Segment
Broadband Segment Coaxial and Fiber Optic Solutions for Cable Television Operators Broadband Sales1 (in millions) FTTX Solutions Coaxial Cable $125 $125 $109 Cable in Conduit Q4 2012 Q3 2013 Q4 2013 Edge QAM Adjusted Operating Income2 (in millions) $8 $4 -$3 Fiber Cable Q4 2012 Q3 2013 Q4 2013 1. Sa
Slide 9: Cash Flow and Liquidity
Cash Flow and Liquidity Cash Flow Highlights Full Year Full Year (in millions) Q4 2012 Q4 2013 2012 2013 Cash Flow from Operations $ 232 $ 86 $ 286 $ 238 Capital Expenditures (9) (9) (28) (37) Debt Redemption Premium -- 33 -- 33 Fee Paid to Terminate Management Agreement -- 20 -- 20 Adjusted Free Ca
Slide 10: Capital Structure
Capital Structure December December December 2011 2012 2013 Cash & Cash Equivalents $ 317 $ 264 $ 346 Debt Term Loan $ 993 $ 983 $ 873 Net Leverage Ratio 2019 Notes 1,500 1,500 1,100 2020 PIK Notes - - 550 Revolver 72 - - 4.9 Other Debt 5 2 1 3.9 OID (6) (13) (9) 3.2 Total Debt $ 2,563 $ 2,471 $ 2,5
Slide 11: Outlook
Outlook • Revenue of $860m - $900m Q1 2014 • Adjusted operating income of $145m - $165m, excluding special items Guidance • Adjusted earnings per diluted share $0.36 – $0.40 reflecting 191 million weighted average diluted shares • 2014 outlook generally consistent with long-term targets • Net sales
Slide 12: Investment Highlights
Investment Highlights • Wireless: Global transition to 4G/LTE, Small Cell DAS, backhaul and backup power Attractive and Growing End • Enterprise: Data center growth, in-building cellular, network intelligence Markets and intelligent buildings • Broadband: Multi-screen and web-based video and network
Slide 13: Appendix
COMMSCOPE’ Appendix
Slide 14: CommScope Overview
CommScope Overview CommScope is a leading global provider of Operating Wireless Enterprise Broadband essential communications infrastructure Segments #1 in merchant Radio Frequency Segment $2.2b $0.8b $0.5b network connectivity solutions and Revenue Wireless small cell DAS solutions--for % of Total
Slide 15: Diversity Across Markets, Geographies & Customers
Diversity Across Markets, Geographies & Customers 2013 2013 Selected Customers Segment Performance Sales by Geography Revenue Broadband 14% Wireless 62% Other Americas 10% Enterprise US 24% 55% APAC 15% Adjusted Operating Income Broadband 3% EMEA Wireless 20% Enterprise 72% 25% Diversified Growth Gl
Slide 16: CommScope Evolution Since Take Private
CommScope Evolution Since Take Private 2010 Now Market • 2G 3G+ LTE deployment Data center Drivers (coverage and growth and • Growing video content capacity) intelligence Transforming Offerings Components Integrated solutions Realign product Strengthened growth Portfolio mix solutions Carrying out S
Slide 17: Financial Priorities
Financial Priorities Drive Cash Flow & Grow Revenue Expand Earnings Manage Capital Structure • Profitable organic • Expand adjusted • Deploy free cash flow growth operating income strategically margin • Continue to enhance • Profit improvement • Improve working commercial position plans capital effi
Slide 18: Long-Term Targets
Long-Term Targets Net Sales Growth Mid single digits Adjusted Operating Margin % Stable margins Adjusted Net Income Growth Low double digits Free Cash Flow Continued strong free cash flow 18
Slide 19: Income Statement
Income Statement (Unaudited -- In thousands) Three Months Ended Twelve Months Ended December 31, December 31, 2013 2012 2013 2012 Net sales $ 846,558 $ 848,211 $ 3,480,117 $ 3,321,885 Operating costs and expenses: Cost of sales 554,716 570,831 2,279,177 2,261,204 Selling, general and administrative
Slide 20: Balance Sheet
Balance Sheet Successor Successor December 31, 2013 December 31, 2012 Assets Cash and cash equivalents $ 346,320 $ 264,375 Accounts receivable, less allowance for doubtful accounts of $12,617 and $14,555, respectively 607,489 596,050 Inventories, net 372,187 311,970 Prepaid expenses and other curren
Slide 21: Cash Flow
Cash Flow (Unaudited -- In thousands) Three Months Ended Twelve Months Ended December 31, December 31, 2013 2012 2013 2012 Operating Activities: Net income (loss) $ (8,912) $ 11,450 $ 19,396 $ 5,353 Adjustments to reconcile net income (loss) to net cash generated by (used in) operating activities: D
Slide 22: Operating Income to Adjusted Net Income Reconciliation
Operating Income to Adjusted Net Income Reconciliation (Unaudited -- In millions) CommScope Holding Company, Inc. Reconciliation of GAAP Measures to Non-GAAP Adjusted Measures (Unaudited -- In millions, except per share amounts) Three Months Ended Year Ended December 31, December 31, 2013 2012 2013
Slide 23: Adjusted Operating Income Reconciliation
Adjusted Operating Income Reconciliation (Unaudited -- In millions) Q4 2013 Q4 2012 LTM Q4 2013 Operating income, as reported $ 60.1 $ 69.1 $ 329.7 Amortization of purchased intangible assets 44.0 43.3 174.9 Restructuring costs, net 5.7 6.0 22.1 Equity-based incentive compensation 3.5 2.1 16.1 Acqui
Slide 24: Adjusted Reconciliation by Quarter
Adjusted Reconciliation by Quarter GAAP to Non-GAAP Adjusted Operating Income and Adjusted EBITDA Reconciliation (Unaudited -- In millions) Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Operating income, as reported $ 60.1 $ 99.8 $ 94.3 $ 75.4 $ 69.1 Amortization of purchased intangible assets 44.0 44.0 4
Slide 25: Full Year Adjusted Reconciliation by Segment
Full Year Adjusted Reconciliation by Segment (Unaudited -- In millions) Twelve Months Ended December 31, 2013 Non-GAAP Adjusted Operating Income by Segment Wireless Enterprise Broadband Total Operating income (loss), as reported $ 303.4 $ 66.7 $ (40.4) $ 329.7 Amortization of purchased intangible as
Slide 26: Quarterly Adjusted Reconciliation by Segment
Quarterly Adjusted Reconciliation by Segment (Unaudited -- In millions) Fourth Quarter 2013 Non-GAAP Adjusted Operating Income Reconciliation by Segment Wireless Enterprise Broadband Total Operating income (loss), as reported $ 57.4 $ 3.0 $ (0.3) $ 60.1 Amortization of purchased intangible assets 22
Slide 27: Quarterly Adjusted Reconciliation by Segment
Quarterly Adjusted Reconciliation by Segment (Unaudited -- In millions) Second Quarter 2013 Non-GAAP Adjusted Operating Income Reconciliation by Segment Wireless Enterprise Broadband Total Operating income (loss), as reported $ 93.2 $ 26.6 $ (25.5) $ 94.3 Amortization of purchased intangible assets
Slide 28: Quarterly Adjusted Reconciliation by Segment
Quarterly Adjusted Reconciliation by Segment (Unaudited -- In millions) Fourth Quarter 2012 Non-GAAP Adjusted Operating Income Reconciliation by Segment Wireless Enterprise Broadband Total Operating income, as reported $ 41.3 $ 26.1 $ 1.6 $ 69.1 Amortization of purchased intangible assets 22.0 16.6
Slide 29: Sales & Adjusted Operating Income by Segment
Sales & Adjusted Operating Income by Segment (Unaudited -- In millions) Sales by Segment % Change Q4 2013 Q3 2013 Q4 2012 YOY Sequential Wireless $ 533.7 $ 552.6 $ 516.0 3.4 % (3.4) % Enterprise 205.2 212.2 208.7 (1.7) % (3.3) % Broadband 109.1 124.6 124.8 (12.6) % (12.4) % Inter-segment elimination