CommScope Reported Third Quarter 2018 Results
-
Third Quarter 2018 Performance
-
Sales of
$1.15 billion , up 2 percent year over year -
GAAP operating income of
$132 million -
Non-GAAP adjusted operating income (excluding special items) of
$219 million -
GAAP net income of
$0.33 per diluted share -
Non-GAAP adjusted net income (excluding special items) of
$0.59 per diluted share, up 7 percent year over year.
-
Sales of
The Company reported sales of
In a separate press release today,
“During the quarter, we took action to ensure
“Through our acquisition of ARRIS, we expect to drive profitable growth in new markets, increase revenue diversity and shape the future of wired and wireless communications. The combined company’s industry-leading technologies, scope and strong customer relationships should put us in a position to capitalize on future growth opportunities and drive significant value creation for our shareholders.”
Third Quarter 2018 Overview
Sales increased 2 percent year over year as growth in the
GAAP operating income in the third quarter of 2018 increased 5 percent
year over year to
Third Quarter 2018 Segment Overview
Third quarter Connectivity Solutions segment sales increased 3 percent
year over year to
Connectivity Solutions GAAP operating income increased 35 percent year
over year to
Third quarter Mobility Solutions segment sales were essentially flat
year over year at
Mobility Solutions GAAP operating income declined 32 percent year over
year to
Outlook
“We are actively taking steps to align our cost structure with current
market dynamics, which we expect to continue into the fourth quarter and
next year,” said Executive Vice President and Chief Financial Officer,
Fourth Quarter 2018 Guidance:
-
Revenue of
$1.015 billion –$1.065 billion -
Operating income of
$60 million –$83 million -
Non-GAAP adjusted operating income of
$145 million –$170 million - Non-GAAP adjusted effective tax rate of approximately 29 percent – 30 percent
-
Loss per share of
$(0.12) –$(0.14) , based on 192 million weighted average basic shares -
Non-GAAP adjusted earnings per diluted share of
$0.34 –$0.39 , based on 195 million weighted average diluted shares
Full Year 2018 Guidance:
-
Revenue of
$4.525 billion –$4.575 billion -
Operating income of
$461 million –$484 million -
Non-GAAP adjusted operating income of
$804 million –$829 million - Non-GAAP adjusted effective tax rate of 29 percent – 30 percent
-
Earnings per diluted share of
$0.70 –$0.72 , based on 195 million weighted average diluted shares -
Non-GAAP adjusted earnings per diluted share of
$2.09 –$2.14 -
Cash flow from operations >
$480 million
A reconciliation of GAAP to non-GAAP outlook is attached.
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Non-GAAP Financial Measures
Forward Looking Statements
This press release includes forward-looking statements that reflect our current views with respect to future events and financial performance, including our proposed acquisition of ARRIS. These statements may discuss goals, intentions or expectations as to future plans, trends, events, results of operations or financial condition or otherwise, in each case, based on current beliefs of management, as well as assumptions made by, and information currently available to, such management. These forward-looking statements are generally identified by their use of such terms and phrases as “intend,” “goal,” “estimate,” “expect,” “project,” “projections,” “plans,” “potential,” “anticipate,” “should,” “could,” “designed to,” “foreseeable future,” “believe,” “think,” “scheduled,” “outlook,” “target,” “guidance” and similar expressions, although not all forward-looking statements contain such terms. This list of indicative terms and phrases is not intended to be all-inclusive.
These forward-looking statements are subject to various risks and
uncertainties, many of which are outside our control, including, without
limitation, our dependence on customers’ capital spending on data and
communication systems; concentration of sales among a limited number of
customers and channel partners; changes in technology; industry
competition and the ability to retain customers through product
innovation, introduction and marketing; risks associated with our sales
through channel partners; changes to the regulatory environment in which
our customers operate; product quality or performance issues and
associated warranty claims; our ability to maintain effective management
information systems and to implement major systems initiatives
successfully; cyber-security incidents, including data security
breaches, ransomware or computer viruses; the risk our global
manufacturing operations suffer production or shipping delays, causing
difficulty in meeting customer demands; the risk that internal
production capacity or that of contract manufacturers may be
insufficient to meet customer demand or quality standards; changes in
cost and availability of key raw materials, components and commodities
and the potential effect on customer pricing; risks associated with our
dependence on a limited number of key suppliers for certain raw material
and components; the risk that contract manufacturers we rely on
encounter production, quality, financial or other difficulties; our
ability to integrate and fully realize anticipated benefits from prior
or future acquisitions or equity investments; potential difficulties in
realigning global manufacturing capacity and capabilities among our
global manufacturing facilities or those of our contract manufacturers
that may affect our ability to meet customer demands for products;
possible future restructuring actions; substantial indebtedness and
maintaining compliance with debt covenants; our ability to incur
additional indebtedness; our ability to generate cash to service our
indebtedness; possible future impairment charges for fixed or intangible
assets, including goodwill; income tax rate variability and ability to
recover amounts recorded as deferred tax assets; our ability to attract
and retain qualified key employees; labor unrest; obligations under our
defined benefit employee benefit plans may require plan contributions in
excess of current estimates; significant international operations
exposing us to economic, political and other risks, including the impact
of variability in foreign exchange rates; our ability to comply with
governmental anti-corruption laws and regulations and export and import
controls worldwide; our ability to compete in international markets due
to export and import controls to which we may be subject; the impact of
the
Such forward-looking statements are subject to additional risks and
uncertainties related to our proposed acquisition of ARRIS, many of
which are outside of our and/or ARRIS’s control, including, without
limitation: failure to obtain applicable regulatory approvals in a
timely manner, on acceptable terms or at all, or to satisfy the other
closing conditions to the proposed acquisition; the risk that we will be
required to pay a reverse break fee under the related acquisition
agreement; the risk that we will not successfully integrate ARRIS or
that we will not realize estimated cost savings, synergies, growth or
other anticipated benefits, or that such benefits may take longer to
realize than expected; risks relating to unanticipated costs of
integration; the potential impact of announcement or consummation of the
proposed acquisition on relationships with third parties, including
customers, employees and competitors; failure to manage potential
conflicts of interest between or among customers; integration of
information technology systems; conditions in the credit markets that
could impact the costs associated with financing the acquisition; the
possibility that competing offers will be made; and other factors beyond
our and/or ARRIS’s control. These and other factors are discussed in
greater detail in our 2017 Annual Report and in Part II, Item 1A, Risk
Factors, of our quarterly report on Form 10-Q for the quarter ended
CommScope Holding Company, Inc. | ||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||
(Unaudited -- In thousands, except per share amounts) | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||
Net sales | $ | 1,150,405 | $ | 1,128,775 | $ | 3,510,778 | $ | 3,440,150 | ||||||||||
Operating costs and expenses: | ||||||||||||||||||
Cost of sales | 726,531 | 700,170 | 2,204,194 | 2,085,973 | ||||||||||||||
Selling, general and administrative | 173,990 | 184,947 | 544,318 | 604,408 | ||||||||||||||
Research and development | 44,807 | 44,599 | 142,436 | 140,569 | ||||||||||||||
Amortization of purchased intangible assets | 65,782 | 68,271 | 199,453 | 202,890 | ||||||||||||||
Restructuring costs, net | 7,070 | 5,360 | 19,738 | 24,521 | ||||||||||||||
Total operating costs and expenses | 1,018,180 | 1,003,347 | 3,110,139 | 3,058,361 | ||||||||||||||
Operating income | 132,225 | 125,428 | 400,639 | 381,789 | ||||||||||||||
Other income (expense), net | (2,379 | ) | 3,209 | (4,490 | ) | (9,248 | ) | |||||||||||
Interest expense | (66,122 | ) | (61,798 | ) | (186,655 | ) | (192,769 | ) | ||||||||||
Interest income | 1,882 | 1,180 | 5,373 | 3,784 | ||||||||||||||
Income before income taxes | 65,606 | 68,019 | 214,867 | 183,556 | ||||||||||||||
Income tax expense | (1,763 | ) | (16,862 | ) | (51,367 | ) | (43,373 | ) | ||||||||||
Net income | $ | 63,843 | $ | 51,157 | $ | 163,500 | $ | 140,183 | ||||||||||
Earnings per share: | ||||||||||||||||||
Basic | $ | 0.33 | $ | 0.27 | $ | 0.85 | $ | 0.73 | ||||||||||
Diluted (a) | $ | 0.33 | $ | 0.26 | $ | 0.84 | $ | 0.71 | ||||||||||
Weighted average shares outstanding: | ||||||||||||||||||
Basic | 192,219 | 191,824 | 191,920 | 192,973 | ||||||||||||||
Diluted (a) | 195,359 | 195,815 | 195,370 | 197,387 | ||||||||||||||
(a) Calculation of diluted earnings per share: | ||||||||||||||||||
Net income (basic and diluted) | $ | 63,843 | $ | 51,157 | $ | 163,500 | $ | 140,183 | ||||||||||
Weighted average shares (basic) | 192,219 | 191,824 | 191,920 | 192,973 | ||||||||||||||
Dilutive effect of equity-based awards | 3,140 | 3,991 | 3,450 | 4,414 | ||||||||||||||
Denominator (diluted) | 195,359 | 195,815 | 195,370 | 197,387 | ||||||||||||||
See notes to unaudited condensed consolidated financial statements included in our Form 10-Q. | ||||||||||||||||||
CommScope Holding Company, Inc. | ||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
(Unaudited -- In thousands, except share amounts) | ||||||||||
September 30, 2018 | December 31, 2017 | |||||||||
Assets | ||||||||||
Cash and cash equivalents | $ | 352,397 | $ | 453,977 | ||||||
Accounts receivable, less allowance for doubtful accounts of | ||||||||||
$18,141 and $13,976, respectively | 901,096 | 898,829 | ||||||||
Inventories, net | 490,767 | 444,941 | ||||||||
Prepaid expenses and other current assets | 123,277 | 146,112 | ||||||||
Total current assets | 1,867,537 | 1,943,859 | ||||||||
Property, plant and equipment, net of accumulated depreciation | ||||||||||
of $425,565 and $390,389, respectively | 445,746 | 467,289 | ||||||||
Goodwill | 2,858,640 | 2,886,630 | ||||||||
Other intangible assets, net | 1,420,677 | 1,636,084 | ||||||||
Other noncurrent assets | 125,696 | 107,804 | ||||||||
Total assets | $ | 6,718,296 | $ | 7,041,666 | ||||||
Liabilities and Stockholders' Equity | ||||||||||
Accounts payable | $ | 441,409 | $ | 436,737 | ||||||
Other accrued liabilities | 323,211 | 286,980 | ||||||||
Total current liabilities | 764,620 | 723,717 | ||||||||
Long-term debt | 3,983,790 | 4,369,401 | ||||||||
Deferred income taxes | 97,849 | 134,241 | ||||||||
Pension and other postretirement benefit liabilities | 20,315 | 25,140 | ||||||||
Other noncurrent liabilities | 96,652 | 141,341 | ||||||||
Total liabilities | 4,963,226 | 5,393,840 | ||||||||
Commitments and contingencies | ||||||||||
Stockholders' equity: | ||||||||||
Preferred stock, $.01 par value: Authorized shares: 200,000,000; | ||||||||||
Issued and outstanding shares: None | — | — | ||||||||
Common stock, $0.01 par value: Authorized shares: 1,300,000,000; | ||||||||||
Issued and outstanding shares: 192,222,782 and 190,906,110, | ||||||||||
respectively | 1,990 | 1,972 | ||||||||
Additional paid-in capital | 2,372,764 | 2,334,071 | ||||||||
Retained earnings (accumulated deficit) | (226,494 | ) | (395,998 | ) | ||||||
Accumulated other comprehensive loss | (171,982 | ) | (86,603 | ) | ||||||
Treasury stock, at cost: 6,738,136 shares and 6,336,144 shares, | ||||||||||
respectively | (221,208 | ) | (205,616 | ) | ||||||
Total stockholders' equity | 1,755,070 | 1,647,826 | ||||||||
Total liabilities and stockholders' equity | $ | 6,718,296 | $ | 7,041,666 | ||||||
See notes to unaudited condensed consolidated financial statements included in our Form 10-Q. |
||||||||||
CommScope Holding Company, Inc. | ||||||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||
(Unaudited -- In thousands) | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||
Operating Activities: | ||||||||||||||||||
Net income | $ | 63,843 | $ | 51,157 | $ | 163,500 | $ | 140,183 | ||||||||||
Adjustments to reconcile net income to net cash generated | ||||||||||||||||||
by operating activities: | ||||||||||||||||||
Depreciation and amortization | 94,280 | 92,090 | 272,629 | 282,543 | ||||||||||||||
Equity-based compensation | 11,327 | 10,974 | 33,723 | 31,572 | ||||||||||||||
Deferred income taxes | (8,006 | ) | (5,903 | ) | (32,616 | ) | (19,976 | ) | ||||||||||
Changes in assets and liabilities: | ||||||||||||||||||
Accounts receivable | 113,486 | 15,079 | (23,537 | ) | 59,054 | |||||||||||||
Inventories | (17,805 | ) | 54,033 | (65,798 | ) | 11,790 | ||||||||||||
Prepaid expenses and other assets | (3,241 | ) | (20,909 | ) | (3,849 | ) | (22,682 | ) | ||||||||||
Accounts payable and other liabilities | (28,604 | ) | (57,728 | ) | 12,277 | (178,505 | ) | |||||||||||
Other | 1,541 | 6,579 | 5,555 | 31,426 | ||||||||||||||
Net cash generated by operating activities | 226,821 | 145,372 | 361,884 | 335,405 | ||||||||||||||
Investing Activities: | ||||||||||||||||||
Additions to property, plant and equipment | (24,604 | ) | (20,575 | ) | (55,448 | ) | (51,152 | ) | ||||||||||
Proceeds from sale of property, plant and equipment | 6,490 | 38 | 12,715 | 5,016 | ||||||||||||||
Proceeds upon settlement of net investment hedge | — | — | 1,331 | — | ||||||||||||||
Cash paid for acquisitions, including purchase price | ||||||||||||||||||
adjustments, net of cash acquired | — | (105,249 | ) | — | (105,249 | ) | ||||||||||||
Other | — | 3,120 | — | 9,898 | ||||||||||||||
Net cash used in investing activities | (18,114 | ) | (122,666 | ) | (41,402 | ) | (141,487 | ) | ||||||||||
Financing Activities: | ||||||||||||||||||
Long-term debt repaid | (550,000 | ) | (25,000 | ) | (550,000 | ) | (805,379 | ) | ||||||||||
Long-term debt proceeds | 150,000 | — | 150,000 | 780,379 | ||||||||||||||
Debt issuance and modification costs | — | — | — | (8,363 | ) | |||||||||||||
Debt extinguishment costs | — | — | — | (14,800 | ) | |||||||||||||
Cash paid for repurchase of common stock | — | (75,000 | ) | — | (175,000 | ) | ||||||||||||
Proceeds from the issuance of common shares under | ||||||||||||||||||
equity-based compensation plans | 73 | 297 | 4,988 | 8,803 | ||||||||||||||
Tax withholding payments for vested equity-based | ||||||||||||||||||
compensation awards | (92 | ) | (98 | ) | (15,592 | ) | (14,956 | ) | ||||||||||
Net cash used in financing activities | (400,019 | ) | (99,801 | ) | (410,604 | ) | (229,316 | ) | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | (1,992 | ) | 3,846 | (11,458 | ) | 18,412 | ||||||||||||
Change in cash and cash equivalents | (193,304 | ) | (73,249 | ) | (101,580 | ) | (16,986 | ) | ||||||||||
Cash and cash equivalents at beginning of period | 545,701 | 484,491 | 453,977 | 428,228 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 352,397 | $ | 411,242 | $ | 352,397 | $ | 411,242 | ||||||||||
See notes to unaudited condensed consolidated financial statements included in our Form 10-Q. | ||||||||||||||||||
CommScope Holding Company, Inc. | ||||||||||||||||||
Reconciliation of GAAP Measures to Non-GAAP Adjusted Measures | ||||||||||||||||||
(Unaudited -- In millions, except per share amounts) | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||
Operating income, as reported | $ | 132.2 | $ | 125.4 | $ | 400.6 | $ | 381.8 | ||||||||||
Adjustments: | ||||||||||||||||||
Amortization of purchased intangible assets | 65.8 | 68.3 | 199.5 | 202.9 | ||||||||||||||
Restructuring costs, net | 7.1 | 5.4 | 19.7 | 24.5 | ||||||||||||||
Equity-based compensation | 11.3 | 11.0 | 33.7 | 31.6 | ||||||||||||||
Integration and transaction costs | 2.6 | 12.0 | 5.3 | 38.2 | ||||||||||||||
Total adjustments to operating income | 86.8 | 96.7 | 258.2 | 297.2 | ||||||||||||||
Non-GAAP adjusted operating income | $ | 219.0 | $ | 222.1 | $ | 658.8 | $ | 679.0 | ||||||||||
Income before income taxes, as reported | $ | 65.6 | $ | 68.0 | $ | 214.9 | $ | 183.6 | ||||||||||
Income tax expense, as reported | (1.8 | ) | (16.9 | ) | (51.4 | ) | (43.4 | ) | ||||||||||
Net income, as reported | $ | 63.8 | $ | 51.2 | $ | 163.5 | $ | 140.2 | ||||||||||
Adjustments: | ||||||||||||||||||
Total pretax adjustments to operating income | 86.8 | 96.7 | 258.2 | 297.2 | ||||||||||||||
Pretax amortization of deferred financing costs & OID (1) | 9.8 | 3.2 | 15.0 | 18.8 | ||||||||||||||
Pretax loss on debt transactions (2) | — | — | — | 16.0 | ||||||||||||||
Pretax net investment gains (2) | — | (2.4 | ) | — | (9.0 | ) | ||||||||||||
Tax effects of adjustments and other tax items (3) | (45.9 | ) | (41.2 | ) | (93.9 | ) | (133.9 | ) | ||||||||||
Non-GAAP adjusted net income | $ | 114.5 | $ | 107.5 | $ | 342.7 | $ | 329.3 | ||||||||||
Diluted EPS, as reported | $ | 0.33 | $ | 0.26 | $ | 0.84 | $ | 0.71 | ||||||||||
Non-GAAP adjusted diluted EPS | $ | 0.59 | $ | 0.55 | $ | 1.75 | $ | 1.67 | ||||||||||
(1) Included in interest expense. | ||||||||||||||||||
(2) Included in other income (expense), net. | ||||||||||||||||||
(3) The tax rates applied to adjustments reflect the tax expense or benefit based on the tax jurisdiction of the entity generating the adjustment. There are certain items for which we expect little or no tax effect. | ||||||||||||||||||
Note: Components may not sum to total due to rounding | ||||||||||||||||||
See Description of Non-GAAP Financial Measures | ||||||||||||||||||
CommScope Holding Company, Inc. | |||||||||||||||||
Sales by Region | |||||||||||||||||
(Unaudited -- In millions) | |||||||||||||||||
Sales by Region |
|||||||||||||||||
% Change | |||||||||||||||||
Q3 2018 | Q3 2017 | YOY | |||||||||||||||
United States | $ | 653.0 | $ | 595.3 | 9.7 | % | |||||||||||
Europe, Middle East and Africa | 235.6 | 231.0 | 2.0 | ||||||||||||||
Asia Pacific | 179.3 | 218.6 | (18.0 | ) | |||||||||||||
Caribbean and Latin America | 59.4 | 62.2 | (4.5 | ) | |||||||||||||
Canada | 23.1 | 21.7 | 6.5 | ||||||||||||||
Total Net Sales | $ | 1,150.4 | $ | 1,128.8 | 1.9 | % | |||||||||||
CommScope Holding Company, Inc. | |||||||||||||||||||||||
Segment Information | |||||||||||||||||||||||
(Unaudited -- In millions) | |||||||||||||||||||||||
Sales by Segment |
|||||||||||||||||||||||
% Change | |||||||||||||||||||||||
Q3 2018 | Q2 2018 | Q3 2017 | Sequential | YOY | |||||||||||||||||||
Connectivity Solutions | $ | 731.7 | $ | 740.5 | $ | 708.7 | (1.2 | ) | % | 3.2 | % | ||||||||||||
Mobility Solutions | 418.7 | 499.4 | 420.1 | (16.2 | ) | % | (0.3 | ) | % | ||||||||||||||
Total Net Sales | $ | 1,150.4 | $ | 1,239.9 | $ | 1,128.8 | (7.2 | ) | % | 1.9 | % | ||||||||||||
Non-GAAP Adjusted Operating Income by Segment |
|||||||||||||||||||||||
% Change | |||||||||||||||||||||||
Q3 2018 | Q2 2018 | Q3 2017 | Sequential | YOY | |||||||||||||||||||
Connectivity Solutions | $ | 147.4 | $ | 142.9 | $ | 138.5 | 3.1 | % | 6.4 | % | |||||||||||||
Mobility Solutions | 71.6 | 108.2 | 83.6 | (33.8 | ) | % | (14.4 | ) | % | ||||||||||||||
Total Non-GAAP Adjusted Operating Income | $ | 219.0 | $ | 251.1 | $ | 222.1 | (12.8 | ) | % | (1.4 | ) | % | |||||||||||
CommScope Holding Company, Inc. | |||||||||||||||
Reconciliation of GAAP to Non-GAAP Adjusted Operating Income by Segment | |||||||||||||||
(Unaudited -- In millions) | |||||||||||||||
Third Quarter 2018 Non-GAAP Adjusted Operating Income Reconciliation by Segment |
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Connectivity | Mobility | ||||||||||||||
Solutions | Solutions | Total | |||||||||||||
Operating income, as reported | $ | 94.9 | $ | 37.3 | $ | 132.2 | |||||||||
Amortization of purchased intangible assets | 44.4 | 21.4 | 65.8 | ||||||||||||
Restructuring costs, net | (0.4 | ) | 7.5 | 7.1 | |||||||||||
Equity-based compensation | 6.9 | 4.4 | 11.3 | ||||||||||||
Integration and transaction costs | 1.7 | 1.0 | 2.6 | ||||||||||||
Non-GAAP adjusted operating income | $ | 147.4 | $ | 71.6 | $ | 219.0 | |||||||||
Non-GAAP adjusted operating margin % | 20.1 | % | 17.1 | % | 19.0 | % | |||||||||
Second Quarter 2018 Non-GAAP Adjusted Operating Income Reconciliation by Segment |
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Connectivity | Mobility | ||||||||||||||
Solutions | Solutions | Total | |||||||||||||
Operating income, as reported | $ | 85.4 | $ | 79.3 | $ | 164.7 | |||||||||
Amortization of purchased intangible assets | 45.0 | 21.4 | 66.4 | ||||||||||||
Restructuring costs, net | 4.7 | 2.5 | 7.2 | ||||||||||||
Equity-based compensation | 7.2 | 4.6 | 11.8 | ||||||||||||
Integration and transaction costs | 0.7 | 0.3 | 1.0 | ||||||||||||
Non-GAAP adjusted operating income | $ | 142.9 | $ | 108.2 | $ | 251.1 | |||||||||
Non-GAAP adjusted operating margin % | 19.3 | % | 21.7 | % | 20.3 | % | |||||||||
Third Quarter 2017 Non-GAAP Adjusted Operating Income Reconciliation by Segment |
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Connectivity | Mobility | ||||||||||||||
Solutions | Solutions | Total | |||||||||||||
Operating income, as reported | $ | 70.4 | $ | 55.0 | $ | 125.4 | |||||||||
Amortization of purchased intangible assets | 44.2 | 24.1 | 68.3 | ||||||||||||
Restructuring costs, net | 5.6 | (0.2 | ) | 5.4 | |||||||||||
Equity-based compensation | 6.4 | 4.6 | 11.0 | ||||||||||||
Integration and transaction costs | 11.9 | 0.2 | 12.0 | ||||||||||||
Non-GAAP adjusted operating income | $ | 138.5 | $ | 83.6 | $ | 222.1 | |||||||||
Non-GAAP adjusted operating margin % | 19.5 | % | 19.9 | % | 19.7 | % | |||||||||
Components may not sum to total due to rounding | |||||||||||||||
See Description of Non-GAAP Financial Measures | |||||||||||||||
CommScope Holding Company, Inc. | |||||||||||
Adjusted Free Cash Flow | |||||||||||
(Unaudited -- In millions) | |||||||||||
Adjusted Free Cash Flow |
|||||||||||
Q3 2018 | Q3 2017 | ||||||||||
Cash flow from operations | $ | 226.8 | $ | 145.4 | |||||||
Integration and transaction costs | — | 12.3 | |||||||||
Capital expenditures | (24.6 | ) | (20.6 | ) | |||||||
Adjusted Free Cash Flow | $ | 202.2 | $ | 137.1 | |||||||
See Description of Non-GAAP Financial Measures | |||||||||||
CommScope Holding Company, Inc. | |||||||||||||||||||||||||
Quarterly Adjusted Operating Income and Adjusted EBITDA | |||||||||||||||||||||||||
(Unaudited -- In millions) | |||||||||||||||||||||||||
GAAP to Non-GAAP Adjusted Operating Income and Adjusted EBITDA Reconciliation |
|||||||||||||||||||||||||
Q3 2018 | Q2 2018 | Q1 2018 | Q4 2017 | Q3 2017 | |||||||||||||||||||||
Operating income, as reported | $ | 132.2 | $ | 164.7 | $ | 103.7 | $ | 90.3 | $ | 125.4 | |||||||||||||||
Amortization of purchased intangible assets | 65.8 | 66.4 | 67.2 | 68.1 | 68.3 | ||||||||||||||||||||
Restructuring costs, net | 7.1 | 7.2 | 5.5 | 19.3 | 5.4 | ||||||||||||||||||||
Equity-based compensation | 11.3 | 11.8 | 10.5 | 10.3 | 11.0 | ||||||||||||||||||||
Integration and transaction costs | 2.6 | 1.0 | 1.7 | 9.8 | 12.0 | ||||||||||||||||||||
Non-GAAP adjusted operating income | $ | 219.0 | $ | 251.1 | $ | 188.6 | $ | 197.7 | $ | 222.1 | |||||||||||||||
Non-GAAP adjusted operating margin % | 19.0 | % | 20.3 | % | 16.8 | % | 17.6 | % | 19.7 | % | |||||||||||||||
Depreciation | 18.7 | 19.9 | 19.6 | 20.8 | 20.6 | ||||||||||||||||||||
Non-GAAP adjusted EBITDA | $ | 237.8 | $ | 271.1 | $ | 208.1 | $ | 218.5 | $ | 242.7 | |||||||||||||||
Components may not sum to total due to rounding | |||||||||||||||||||||||||
See Description of Non-GAAP Financial Measures | |||||||||||||||||||||||||
CommScope Holding Company, Inc. | ||||||||
Reconciliation of GAAP Measures to Non-GAAP Adjusted Measures | ||||||||
(Unaudited -- In millions, except per share amounts) | ||||||||
Outlook | ||||||||
Three Months Ended | ||||||||
December 31, | Full Year | |||||||
2018 | 2018 | |||||||
Operating income | $ | 60 - $83 | $ | 461 - $484 | ||||
Adjustments: | ||||||||
Amortization of purchased intangible assets | $ | 66 | $ | 265 | ||||
Equity-based compensation | $ | 12 | $ | 46 | ||||
Restructuring costs, integration and transaction costs and other (1) |
$ | 7 - $9 | $ | 32 - $34 | ||||
Total adjustments to operating income | $ | 85 - $87 | $ | 343 - $345 | ||||
Non-GAAP adjusted operating income | $ | 145 - $170 | $ | 804 - $829 | ||||
Diluted earnings per share (basic loss per share) | $ | (0.12) - $(0.14) | $ | 0.70 - $0.72 | ||||
Adjustments (2): | ||||||||
Total adjustments to operating income | $ | 0.32 - $0.36 | $ | 1.32 - $1.34 | ||||
Debt-related costs and other special items (3) | $ | 0.14 - $0.17 | $ | 0.07 - $0.08 | ||||
Non-GAAP adjusted diluted earnings per share | $ | 0.34 - $0.39 | $ | 2.09 - $2.14 | ||||
(1) Reflects projections for restructuring costs, integration and transaction costs and other special items. Actual adjustments may vary from projections. | ||||||||
(2) The tax rates applied to projected adjustments reflect the tax expense or benefit based on the expected tax jurisdiction of the entity generating the projected adjustments. There are certain items for which we expect little or no tax effect. | ||||||||
(3) Reflects projections for amortization of debt issuance costs, loss on debt extinguishment, net losses on defined benefit plan terminations, foreign exchange losses triggered by the liquidation of subsidiaries and tax items. Actual adjustments may vary from projections. | ||||||||
Our actual results may be impacted by additional events for which information is not currently available, such as additional restructuring activities, asset impairments, debt extinguishments, additional transaction and integration costs, foreign exchange rate fluctuations and other gains or losses related to events that are not currently known or measurable. | ||||||||
See Caution Regarding Forward-Looking Statements and Description of Non-GAAP Financial Measures. | ||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20181108005232/en/
Source:
Investor Contact:
Kevin Powers, CommScope
+1
828-323-4970
Kevin.powers@commscope.com
or
News
Media Contact:
Rick Aspen, CommScope
+1 708-236-6568
publicrelations@commscope.com