Vistance Networks, Inc. · NASDAQ:VISN
Vistance Networks — CommScope Holding Company — Q4 2019 Earnings Presentation
30 slides from Vistance Networks's earnings presentation, Feb 20, 2020
Slide 1: Fourth Quarter and Full Year 2019 Results
Fourth Quarter and Full Year 2019 Results Eddie Edwards Alex Pease February 20, 2020 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: Business Overview
Business Overview February 20, 2020 Eddie Edwards President & CEO
Slide 4: Fourth Quarter 2019 Financial Highlights
Fourth Quarter 2019 Financial Highlights 4Q’19 FINANCIAL HIGHLIGHTS • Net sales of $2.3 billion in-line with guidance, adjusted EBITDA of $324 million(1) at the high end of guidance and adjusted EPS of $0.46(1) above the high end of guidance. • Adjusted EBITDA margins expanded 20 bps to 14.1% on a c
Slide 5: Fourth Quarter 2019 Business Highlights
Fourth Quarter 2019 Business Highlights BUSINESS SEGMENT FOURTH QUARTER HIGHLIGHTS Connectivity Solutions • Continued pressure in enterprise indoor copper market. Actively investing in category 6A capabilities for solutions to increase bandwidth and Power over Ethernet needs. • Network cabling and c
Slide 6: Full Year, Fourth Quarter 2019 Results and First Quarter 2020 Outlook
Full Year, Fourth Quarter 2019 Results and First Quarter 2020 Outlook February 20, 2020 Alex Pease EVP & CFO
Slide 7: CommScope Full Year 2019 Financial Results
CommScope Full Year 2019 Financial Results Net Sales (1) ($M) Adj. EBITDA(2) ($M) Adj. EPS(2) -14% -20% -5% $11,311 $1,718 $1,368 $9,755 $1,298 $2.27 $8,345 $914 $2.15 $4,569 FY'18 FY'19 FY'18 FY'19 FY'18 FY'19 FY'18 FY'19 FY'18 FY'19 Combined Company(3) Combined Company(3) • Non-GAAP adjusted net i
Slide 8: CommScope 4Q'19 Financial Results
CommScope 4Q’19 Financial Results Net Sales(1) ($M) Adj. EBITDA(2) ($M) Adj. EPS(2) -19% -18% -10% $2,845 $0.51 $397 $2,299 $2,299 $324 $324 $197 $0.46 $1,058 4Q'18 4Q'19 4Q'18 4Q'19 4Q'18 4Q'19 4Q'18 4Q'19 4Q'18 4Q'19 Combined Company(3) Combined Company(3) • Declines primarily due to lower cable o
Slide 9: Segment 4Q'19 Financial Results
Segment 4Q’19 Financial Results Connectivity Solutions Mobility Solutions Net Sales ($M) Adj. EBITDA(1) ($M) Net Sales ($M) Adj. EBITDA(1) ($M) -9% -32% -6% -11% $667 $135 $62 $606 $55 $391 $366 $91 4Q'18 4Q'19 4Q'18 4Q'19 4Q'18 4Q'19 4Q'18 4Q'19 • Spending declines with carriers, cable • Adj. EBITD
Slide 10: Segment 4Q'19 Financial Results
Segment 4Q’19 Financial Results Customer Premises Equipment Network and Cloud Ruckus Networks Net Sales(1) ($M) Adj. EBITDA(2) ($M) Net Sales(1) ($M) Adj. EBITDA(2) ($M) Net Sales(1) ($M) Adj. EBITDA(2) ($M) -25% +48% -32% -36% -9% $72 $13 $8 $1,099 $537 $151 $138 $824 $49 $152 $366 $97 $(1) 4Q'18 4
Slide 11: Cash Flow Update
Cash Flow Update Cash Flow from Operations (1)($M) Adj. Free Cash Flow(1) (2)($M) $793 $522 $596 $535 $336 $323 $2 $(10) $(252) $(67) 1Q’19 2Q’19 3Q’19 4Q’19 FY’19 1Q’19 2Q’19 3Q’19 4Q’19 FY’19 • Second half growth in cash flow from operations primarily due to an improvement in the cash conversion c
Slide 12: Capital Structure Update
Debt Maturities ($M) as of 12/31/2019 Capital Structure Update $1,500* Net Leverage • 12/31/19 CommScope net leverage: 6.3x(1) • Long-term target: 2.0x-3.0x $1,000* $3,192* Liquidity of $1.4 billion $650 $750 Additional $100 million • Cash of $598 million as of December 31, 2019 redeemed February 20
Slide 13: Business Unit Structure Implemented January 2020
Business Unit Structure Implemented January 2020 2019 2020 Building and Campus (CCS Indoor Copper / Ruckus) Venue & Campus Networks Data Centers (CCS Indoor Fiber) Venues (CMS DAS & OneCell) Broadband Networks Broadband Access (CCS NCC & Network and Cloud) Video Systems & Security (Network and Cloud
Slide 14: 2020 Segment Outlook Commentary
2020 Segment Outlook Commentary Broadband Networks Venue & Campus Networks • Expect modest sales growth with increases in both Network, Cable and • Expect mid-single digit sales growth with increases in Ruckus, Indoor Fiber, DAS Connectivity, and Network & Cloud based on a modest recovery in cable o
Slide 15: 2020 Outlook
Net Sales Modest decline to prior year on a combined-company basis 2020 Outlook Non-GAAP Adj. EBITDA Consistent with prior year on a combined-company basis Non-GAAP Adj. Effective Tax Rate 26-27% Committed to delivering Weighted Average Diluted Shares ~237 million shareholder value Non-GAAP EPS Decl
Slide 16: 1Q'20 Guidance
1Q’20 Guidance Due to the uncertainty regarding the impact of Net Sales $1.9 billion - $2.1 billion the Coronavirus, we are providing a wider than normal guidance range for the first quarter. Non-GAAP Adj. EBITDA $180 million - $260 million Given that a portion of our raw materials and products are
Slide 17: 2020 Outlook Themes
2020 Outlook Themes Home Networks Outdoor Wireless & 5G Networks Venue and Campus Networks • DOCSIS 4.0, 6GHz • Rollout of 5G • New standards, spectrum and Wi-Fi 6 products and services enabling new services • Densifying and drive demand for powering up the bandwidth • 10Gbps access speeds, network
Slide 18: Appendix
COMMSCOPE’ Appendix
Slide 19: Statement of Operations
CommScope Holding Company, Inc. Condensed Consolidated Statements of Operations (Unaudited -- In millions, except per share amounts) Statement of Thre e Months Ende d De ce mbe r 31, Ye ar Ende d De ce mbe r 31, Operations 2019 2018 2019 2018 Net sales $ 2,298.7 $ 1,057.7 $ 8,345.1 $ 4,568.5 Cost of
Slide 20: Balance Sheet
Balance Sheet 19 © 2020 CommScope, Inc. All rights reserved. | CommScope, ARRIS and the ARRIS logo are trademarks of CommScope, Inc. and/or its affiliates. All other trademarks are the property of their respective owners.
Slide 21: Statement of Cash Flows
Statement of Cash Flows 20 © 2020 CommScope, Inc. All rights reserved. | CommScope, ARRIS and the ARRIS logo are trademarks of CommScope, Inc. and/or its affiliates. All other trademarks are the property of their respective owners.
Slide 22: Adjusted Operating Income, EBITDA, and Net Income
CommScope Holding Company, Inc. Reconciliation of GAAP Measures to Non-GAAP Adjusted Measures (Unaudited -- In millions, except per share amounts) Adjusted Operating Three Months Ended December 31, 2019 2018 Year Ended December 31, 2019 2018 Income, EBITDA, and Net income (loss), as reported Income
Slide 23: Sales by Region
Sales by Region CommScope Holding Company, Inc. Sales by Region (Unaudited -- In millions) Sales by Region % Change Q4 2019 Q4 2018 YOY United States $ 1,350.8 $ 564.1 139.5 % Europe, Middle East and Africa 419.3 224.3 86.9 Asia Pacific 253.8 184.5 37.6 Caribbean and Latin America 174.2 65.8 164.7 C
Slide 24: Sales and Adjusted EBITDA by Segment
CommScope Holding Company, Inc. Segment Information (Unaudited -- In millions) Sales and Adjusted Sales by Segment Combined EBITDA by Segment Connectivity $ Q4 2019 605.9 $ Company Q4 2018 (1) 666.9 % Change YOY (9.1) % Mobility 365.6 390.8 (6.4) % CPE 823.6 1,099.0 (25.1) % N&C 366.1 536.8 (31.8) %
Slide 25: Sales and Adjusted EBITDA by Segment
CommScope Holding Company, Inc. Segment Information (Unaudited -- In millions) Sales and Adjusted Sales by Segment EBITDA by Segment As Reported 2019 2019 ARRIS Pre- acquisition (1) Combined Company 2019 (1) Combined Company 2018 (1) % Change YOY Connectivity $ 2,557.4 $ — $ 2,557.4 $ 2,812.7 (9.1)
Slide 26: Adjusted EBITDA Reconciliation by Segment
CommScope Holding Company, Inc. Reconciliation of GAAP to Segment Adjusted EBITDA (Unaudited -- In millions) Fourth Quarter 2019 Segment Adjusted EBITDA Reconciliation Adjusted EBITDA Operating income (loss), as reported Connectivity Mobility $ 28.9 $ 23.5 CPE $ (174.8) $ (166.4) $ N&C Ruckus Total
Slide 27: Adjusted EBITDA Reconciliation by Segment
Reconciliation of GAAP to Segment Adjusted EBITDA (Unaudited -- In millions) Year Ended December 31, 2019 Segment Adjusted EBITDA Reconciliation Combined Combined Combined Combined Adjusted EBITDA (1) (1) (1) (1) Company Company Company Company Connectivity Mobility CPE N&C Ruckus Total Operating in
Slide 28: 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 Full Year Full Year Q4 2019 Q4 2018 2019 2018 Cash flow from operations $ 336.0 $ 132.3 $ 596.4 $ 494.1 Capital expenditures (31.8) (26.9) (104.1) (82.3)
Slide 29: New Segment 2019 Financial Information
New Segment 2019 Financial Information 28 © 2020 CommScope, Inc. All rights reserved. | CommScope, ARRIS and the ARRIS logo are trademarks of CommScope, Inc. and/or its affiliates. All other trademarks are the property of their respective owners.
Slide 30: Outlook GAAP to Non-GAAP Reconciliation
CommScope Holding Company, Inc. Reconciliation of GAAP Measures to Non-GAAP Adjusted Measures (Unaudited -- In millions, except per share amounts) Outlook GAAP to Outlook Non-GAAP Three Months Ended March 31, 2020 Reconciliation Net loss Income tax benefit Interest income Interest expense $(181) - $
CommScope Holding Company — Q4 2019 Earnings Presentation on 6ix