Vistance Networks, Inc. · NASDAQ:VISN
Vistance Networks — CommScope Holding Company — Q3 2016 Earnings Presentation
22 slides from Vistance Networks's earnings presentation, Nov 3, 2016
Slide 1: Third Quarter 2016 Results
Eddie Edwards Third Quarter 2016 Results President and Chief Executive Officer November 3, 2016 Mark Olson Executive Vice President and Chief Financial Officer 1
Slide 2: Safe Harbor
Safe Harbor Caution Regarding Forward Looking Statements During this presentation or any other 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
Slide 3: Agenda
Agenda • Third quarter 2016 highlights • Third quarter 2016 results • Segment review • Cash flow, liquidity and capital structure • Fourth quarter and calendar year 2016 outlook 3 3
Slide 4: Q3 2016 Highlights
Q3 2016 Highlights • Revenue, on a pro forma basis(1), up 4% YOY driven by NAR FTTX strength • Gross Margin of 42% • Adjusted Operating Margin(2) of 23%, up 225 bps YOY • Adjusted EPS(2) of $0.81, up 53% YOY • Cash Flow from Operations of $257 million, up 128% YOY • Net Leverage Ratio below 4x; Repa
Slide 5: Q3 2016 Results
Q3 2016 Results Revenue Operating Income Diluted Earnings Per Share (in millions) (in millions) $1,307 $291 $297 $0.81 $1,294 $0.74 $973 Adjusted(1) $201 $184 $181 Adjusted(1) $0.53 $0.48 $0.32 $(43) $(0.42) GAAP GAAP Q3 2015 Q2 2016 Q3 2016 Q3 2015 Q2 2016 Q3 2016 Q3 2015 Q2 2016 Q3 2016 Sales & Or
Slide 6: CommScope Connectivity Solutions (CCS)
CommScope Connectivity Solutions (CCS) Residential/ Fiber to MDU the Home Outside Plant Revenue (in millions) $778 $819 Actual Up 68% YOY $489 CATV Headend Fiber Backhaul Pro Forma(1) Up 9% YOY Q3 2015 Q2 2016 Q3 2016 Intelligent Building Operating Income (in millions) Data $189 Center $169 Q3 2016
Slide 7: Broad Portfolio to Support Strong FTTX Growth
Broad Portfolio to Support Strong FTTX Growth Innovative technologies Broad product portfolio Customer relationships OptiTAPTM Compatible 4-Port MST DLX 12-Port MST 7 OptiTAPTM is a trademark of Corning Optical Communications Brands, Inc. 7
Slide 8: CommScope Mobility Solutions (CMS)
CommScope Mobility Solutions (CMS) Outdoor Additional Offerings Cell Site Revenue Cabling & connectivity Filters & combiners (in millions) Services $484 $529 $475 Actual Microwave Metro & Backhaul Down 2% YOY Small Cell Cloud Pro Forma(1) RAN Nodes Integrated Cabinet Down 4% YOY Q3 2015 Q2 2016 Q3 2
Slide 9: Cash Flow and Liquidity
Cash Flow and Liquidity Cash Flow Highlights LTM LTM (in millions) Q3 2015 Q3 2016 Q3 2015 Q3 2016 Cash flow from operations $ 112 $ 257 $ 314 $ 642 Capital expenditures, net of capital expenditures related to BNS integration(1) (12) (15) (40) (60) Cash paid for transaction & integration costs 53 17
Slide 10: Capital Structure
Capital Structure Capital Summary & Net Leverage Ratio Major Debt Maturities as of September 30, 2016(1) (dollars in millions) 9/30/2016 (in millions) 5.00% and 5.50% Notes $ 1,300.0 Term Loans 1,499.4 6.00% Notes 1,500.0 Secured Notes 500.0 Less: OID & DFF (85.4) Total Debt $ 4,714.0 $1,500 Cash &
Slide 11: Outlook
Outlook(1) • Sales of $1.14 billion - $1.19 billion • Operating income of $111 million - $128 million Q4 2016 • Adjusted operating income of $220 million - $240 million • Earnings per diluted share of $0.18 - $0.20, based on 197 million weighted average Guidance diluted shares • Adjusted earnings pe
Slide 12: Strong third quarter results and FTTX growth
Strong third FTTX growth Network quarter results and competitive convergence position driving opportunity 12 12
Slide 13: 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 14: Income Statements
Income Statements Three Months Ended Nine Months Ended (Unaudited -- In thousands, September 30, September 30, except per share amounts) 2016 2015 2016 2015 Net sales $ 1,293,948 $ 972,597 $ 3,744,715 $ 2,665,287 Operating costs and expenses: Cost of sales 751,097 633,706 2,201,014 1,718,497 Selling
Slide 15: Balance Sheets
Balance Sheets September 30, 2016 December 31, 2015 (Unaudited -- In thousands, Assets except share amounts) Cash and cash equivalents $ 517,275 $ 562,884 Accounts receivable, less allowance for doubtful accounts of $19,388 and $19,392, respectively 966,839 833,041 Inventories, net 475,679 441,815 P
Slide 16: Statements of Cash Flows
Statements of Cash Flows Three Months Ended Nine Months Ended September 30, September 30, (Unaudited -- In thousands) 2016 2015 2016 2015 Operating Activities: Net income (loss) $ 93,831 $ (80,796) $ 168,372 $ 4,272 Adjustments to reconcile net income to net cash generated by operating activities: D
Slide 17: Quarter Segment Information
Quarter Segment Information (Unaudited -- In millions) Sales by Segment (1) % Change Q3 2016 Q2 2016 Q3 2015 Sequential YOY Connectivity Solutions 819.2 778.0 489.0 5.3 % 67.5 % Mobility Solutions 474.7 528.8 483.6 (10.2) % (1.8) % Total Net Sales $ 1,293.9 $ 1,306.8 $ 972.6 (1.0) % 33.0 % Non-GAAP
Slide 18: Pro Forma Sales
Pro Forma Sales (Unaudited -- In millions) Pro Forma Sales(1) Full Year Q1 2015 Q2 2015 Q3 2015 Q4 2015(2) 2015 Legacy CommScope $ 825.4 $ 867.3 $ 831.5 $ 754.0 $ 3,278.2 Legacy BNS 424.9 471.0 415.8 388.5 1,700.2 Total Pro Forma Net Sales $ 1,250.3 $ 1,338.3 $ 1,247.3 $ 1,142.5 $ 4,978.4 Pro Forma
Slide 19: Adjusted Operating Income Reconciliation by Quarter
Adjusted Operating Income Reconciliation by Quarter (Unaudited -- In millions) Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Operating income (loss), as reported $ 180.7 $ 183.9 $ 90.7 $ 21.6 $ (42.5) Amortization of purchased intangible assets 74.6 76.0 73.6 76.9 54.3 Restructuring costs, net 10.8 7.6 6.
Slide 20: Quarterly Adjusted Operating Income Reconciliation by Segment
Quarterly Adjusted Operating Income Reconciliation by Segment Third Quarter 2016 Non-GAAP Adjusted Operating Income Reconciliation by Segment (1) (Unaudited -- In millions) Connectivity Mobility Solutions Solutions Total Operating income, as reported $ 104.8 $ 75.9 $ 180.7 Amortization of purchased
Slide 21: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation Three Months Ended Nine Months Ended (Unaudited – In millions) September 30, September 30, 2016 2015 2016 2015 Operating income (loss), as reported $ 180.7 $ (42.5) $ 455.3 $ 160.0 Adjustments: Amortization of purchased intangible assets 74.6 54.3 224.3 143.7 Restr
Slide 22: Outlook GAAP to Non-GAAP Reconciliation
Outlook GAAP to Non-GAAP Reconciliation Outlook (Unaudited -- In millions) Three Months Ending December 31, Full Year 2016 2016 Operating income $111 - $128 $566 - $583 Adjustments: Amortization of purchased intangible assets $71 $295 Equity-based compensation $9 $36 (1) Restructuring costs, integra
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