Vistance Networks, Inc. · NASDAQ:VISN
Vistance Networks — CommScope Holding Company — Q2 2019 Earnings Presentation
26 slides from Vistance Networks's earnings presentation, Aug 8, 2019
Slide 1: Second Quarter 2019 Results
Second Quarter 2019 Results August 8, 2019 Eddie Edwards Alex Pease President & CEO EVP & CFO
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: Second Quarter 2019 Results
Second Quarter 2019 Results August 8, 2019 Alex Pease EVP & CFO
Slide 4: Delivering on our second quarter commitments
Delivering on our second quarter commitments In millions, except per share amounts $2,585 Net Sales(1) Guidance Range: $2,490 $2,650 $396 Adjusted EBITDA(2) Guidance Range: $365 $405 $0.66 Adjusted EPS(2) Guidance Range: $0.54 $0.62 (1) Net sales as presented for 2Q’19 excludes $18.3 million of acqu
Slide 5: CommScope 2Q'19 Financial Results
CommScope 2Q’19 Financial Results Net Sales(1) ($M) Adj. EBITDA(2) ($M) Adj. EPS(2) -12% -20% -3% $2,966 $476 $0.68 $2,585 $2,614 $396 $0.66 $381 $271 $1,240 2Q'18 2Q'19 2Q'18 2Q'19 2Q'18 2Q'19 2Q'18 2Q'19 2Q'18 2Q'19 Pro forma(3) Pro forma (3) • Excluding FX, pro forma net sales decreased 11%. • Pr
Slide 6: Segment 2Q'19 Financial Results
Segment 2Q’19 Financial Results CONNECTIVITY SOLUTIONS MOBILITY SOLUTIONS Net Sales ($M) Adj. EBITDA(1) ($M) Net Sales ($M) Adj. EBITDA(1) ($M) -9% -10% +6% +23% $741 $140 $671 $499 $529 $157 $114 $142 2Q'18 2Q'19 2Q'18 2Q'19 2Q'18 2Q'19 2Q'18 2Q'19 • Excluding FX, sales declined 8%. • Adj. EBITDA d
Slide 7: Segment 2Q'19 Financial Results
Segment 2Q’19 Financial Results C U S TO M E R P R E M I S E E Q U I P M E N T NET WORK AND CLOUD RUCKUS NETWORKS Net Sales(1) ($M) Adj. EBITDA(2) ($M) Net Sales(1) ($M) Adj. EBITDA(2) ($M) Net Sales(1) ($M) Adj. EBITDA(2) ($M) -9% -2% -37% -73% -10% -83% $1,008 $550 $169 $913 $129 $890 $61 $60 $62
Slide 8: Cash Flow Update
Cash Flow Update Adj. Cash Flow from Operations(1) ($M) Adj. Free Cash Flow(1) ($M) $366 $267 $110 $93 ($40) ($67) 2Q’18 2Q’19 2Q’19 TTM 2Q’18 2Q’19 2Q’19 TTM • Year-over-year reduction in adjusted cash flow from operations primarily due to additional cash interest as a result of the ARRIS acquisiti
Slide 9: Capital Structure Update
Capital Structure Update OVERVIEW CommScope (As of 6/30/19) Net Leverage Debt Maturities • 6/30/19 CommScope net leverage: 6.0x(1) Secured Debt Unsecured Debt • Long-term target: 2.0x-3.0x ABL * 5.00% Notes due 2021 (par call) * Covenant “Lite” Debt Facilities Term Loan B * 5.50% Notes due 2024 5.50
Slide 10: 3Q'19 Guidance
3Q’19 Guidance CommScope 3Q’19 Guidance Sales $2.3 billion – $2.5 billion Non-GAAP Adj. EBITDA $310M - $370M Non-GAAP Adj. Effective Tax Rate 29% - 30% Weighted Average Diluted Shares ~232M Non-GAAP EPS $0.37 - $0.47 Note: See appendix for reconciliation of non-GAAP adjusted measures.. 10 © 2019 Com
Slide 11: Outlook Commentary
Outlook Commentary COMMSCOPE ARRIS Densification of 4G networks in preparation for 5G at the metrocell layer Major operators increasing cable capex in second half Continuation of FirstNet deployment and investment in access layer CPE component cost improvement ± Pressure from Indoor Copper t
Slide 12: Second Quarter 2019 Results
Second Quarter 2019 Results August 8, 2019 Eddie Edwards President & CEO
Slide 13: We are deploying the CommScope playbook to manage near-term headwinds
We are deploying the CommScope playbook to manage near-term headwinds to maximize profitability Immediate strategic actions to improve results and deliver greater value to shareholders 1 Elimination of the COO position to streamline the organization and flatten the leadership structure to expand acc
Slide 14: COMMSCOPE + ARRIS = Accelerate CommScope's vision
COMMSCOPE + ARRIS = Accelerate CommScope’s vision to shape the communications networks of the future Venue solution that combines our next generation ERA DAS technology, with the Ruckus wireless LAN and switching technology, that will provide a greater capacity capability than ever before Ability to
Slide 15: Summary
SUMMARY 2019 is a more Remain confident Intense 2020 willfocus be a in 2020 will be a Excited about the challenging year we will grow 2019 on cost stronger year due stronger year due ARRIS acquisition than expected faster than the reductions and to Ruckus, 5G, to Ruckus, 5G, and the numerous primari
Slide 16: Appendix
COMMSCOPE’ Appendix
Slide 17: Statement of Operations
CommScope Holding Company, Inc. Statement of Condensed Consolidated Statements of Operations (Unaudited -- In millions, except per share amounts) Operations Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Net sales $ 2,566.7 $ 1,239.9 $ 3,666.3 $ 2,360.4 Cost of sales 1,906
Slide 18: Balance Sheet
CommScope Holding Company, Inc. Balance Sheet Condensed Consolidated Balance Sheets (Unaudited -- In millions, except share amounts) June 30, 2019 De ce mbe r 31, 2018 Assets Cash and cash equivalents $ 348.0 $ 458.2 Accounts receivable, less allowance for doubtful accounts of $25.6 and $17.4, respe
Slide 19: Statement of Cash Flows
CommScope Holding Company, Inc. Statement of Condensed Consolidated Statements of Cash Flows (Unaudited -- In millions) Three Months Ended Six Months Ended Cash Flows June 30, June 30, 2019 2018 2019 2018 Operating Activities: Net income (loss) $ (334.0) $ 65.9 $ (336.3) $ 99.7 Adjustments to reconc
Slide 20: Adjusted Operating Income, EBITDA, and Net Income Reconciliation
Adjusted CommScope Holding Company, Inc. Reconciliation of GAAP Measures to Non-GAAP Adjusted Measures (Unaudited -- In millions, except per share amounts) Operating Three Months Ended S ix Months Ended June 30, June 30, 2019 2018 2019 2018 Income, Operating income (loss), as reported $ (209.2) $ 16
Slide 21: Sales by Region
Sales by Region CommScope Holding Company, Inc. Sales by Region (Unaudited -- In millions) Sales by Region % Change Q2 2019 Q2 2018 YOY United States $ 1,500.7 $ 714.6 110.0 % Europe, Middle East and Africa 471.3 253.4 86.0 Asia Pacific 267.4 183.2 46.0 Caribbean and Latin America 225.4 61.6 265.9 C
Slide 22: Sales and Adjusted EBITDA by Segment
Sales and CommScope Holding Company, Inc. Segment Information (Unaudited -- In millions) Adjusted Sales by Segment As Deferred (2) Pro Pro Pro reported Revenue As Adjusted Apr 1 - forma (3) forma (4) forma (4) % Change EBITDA by Q2 2019 Adj (1) Q2 2019 Apr 3 Q2 2019 Q1 2019 Q2 2018 S equential YOY C
Slide 23: Quarterly Adjusted EBITDA Reconciliation by Segment
CommScope Holding Company, Inc. Quarterly Reconciliation of GAAP to Non-GAAP Adjusted EBITDA by Segment (Unaudited -- In millions) Adjusted Second Quarter 2019 Non-GAAP Adjusted EBITDA Reconciliation by Segment Connectivity Mobility CPE N&C Ruckus Total Operating income (loss), as reported $ 60.5 $
Slide 24: 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 TTM Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q2 2019 Cash flow from operations $ 226.8 $ 132.3 $ (10.0) $ (251.7) $ 97.4 Capital expenditures (24.6) (26.9) (21.4)
Slide 25: Non-GAAP Pro Forma Adjusted EBITDA Reconciliation
Non-GAAP CommScope Holding Company, Inc. Reconciliation of Non-GAAP Measures (unaudited – in millions) Pro Forma Consolidated Adjusted Three Months Six Months Year Twelve Months Ended Ended Ended Ended June 30, June 30, December 31, June 30, 2019 2018 2019 2018 2018 2019 EBITDA Operating income (los
Slide 26: Outlook GAAP to Non-GAAP Reconciliation
CommScope Holding Company, Inc. Reconciliation of GAAP Measures to Non-GAAP Adjusted Measures Outlook GAAP (Unaudited -- In millions, except per share amounts) Outlook to Non-GAAP Three Months Ended S eptember 30, 2019 Reconciliation Operating income (loss) $(5) - $5 Adjustments: Amortization of pur
CommScope Holding Company — Q2 2019 Earnings Presentation on 6ix