CommScope Reports Fourth Quarter 2014 Results
-
Fourth Quarter Results Consistent with Most Recent Guidance
-
Sales of
$828 million -
Operating Income of
$76 million and adjusted operating income of$139 million , or 17 percent of sales -
Net income of
$0.25 per diluted share, compared to a loss of$0.05 per share
in the prior year period -
Adjusted net income grew 34 percent year over year to
$73 million , resulting in adjusted earnings of$0.38 per diluted share -
Solid fourth quarter adjusted free cash flow of
$116 million
-
Sales of
-
Outstanding Calendar Year 2014 Performance
-
Sales increased 10 percent year over year to
$3.8 billion -
Adjusted operating income rose 30 percent year over year to
$808 million , or 21 percent of sales -
Adjusted net income grew 63 percent year over year to
$427 million , resulting in adjusted earnings of$2.23 per diluted share -
Adjusted free cash flow of
$346 million
-
Sales increased 10 percent year over year to
For the quarter ended
"CommScope had an outstanding year by nearly all financial and
operational measures," said President and Chief Executive Officer
"We intend to build upon this success through the planned acquisition of
TE Connectivity's Telecom, Enterprise and Wireless businesses. We
believe this acquisition will broaden our position as a leading
communications infrastructure provider and better position
Fourth Quarter 2014 Overview
Fourth quarter 2014 sales declined 2 percent year over year to
After substantial growth in the first nine months of 2014, Wireless
segment sales in the fourth quarter declined 9 percent year over year to
Fourth quarter Enterprise segment sales increased 4 percent year over
year to
Fourth quarter Broadband segment sales increased 20 percent year over
year to
Operating income in the fourth quarter grew 27 percent to
GAAP net income rose substantially to
Adjusted net income and earnings per share rose mainly due to lower
interest expense and a lower adjusted effective tax rate in the quarter.
The company reduced interest expense by redeeming debt with the net
proceeds from its initial public offering in
Calendar Year 2014 Overview
For the full year, sales increased 10 percent to
For full year 2014, Enterprise segment sales increased 3 percent. Large
enterprises continue to invest in global information technology, data
centers and commercial buildings in order to meet the ongoing demands
for bandwidth and intelligence in networks. Enterprise adjusted
operating income for the year increased 7 percent year over year to
Broadband segment sales in 2014 rose 5 percent to
GAAP operating income increased 75 percent to
Proposed Transaction with TE Connectivity
On
Outlook
First Quarter 2015 Guidance:
-
Revenue of
$800 million -$850 million -
Adjusted operating income of
$135 million -$155 million -
Adjusted earnings per diluted share of
$0.33 -$0.38 , based on a share count of 192 million weighted average diluted shares
Full Year 2015 Guidance:
-
Revenue of
$3.65 billion -$3.80 billion -
Adjusted operating income of
$725 million -$775 million -
Adjusted earnings per diluted share of
$1.95 -$2.05 , based on a share count of 194 million weighted average diluted shares - Strong free cash flow
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About
Non-GAAP Financial Measures
Forward Looking Statements
The press release includes forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) which reflect our current views with respect to future events and financial performance. These forward-looking statements are identified by their use of such terms and phrases as "intend," "goal," "estimate," "expect," "project," "projections," "plans," "anticipate," "should," "could," "designed to," "foreseeable future," "believe," "think," "scheduled," "outlook," "guidance" and similar expressions. This list of indicative terms and phrases is not intended to be all-inclusive.
These 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 communication systems; concentration of sales among a limited number of customers or distributors; changes in technology; our ability to fully realize anticipated benefits from prior or future acquisitions or equity investments; industry competition and the ability to retain customers through product innovation, introduction and marketing; risks associated with our sales through channel partners; possible production disruptions due to supplier or contract manufacturer bankruptcy, reorganization or restructuring; the risk our global manufacturing operations suffer production or shipping delays causing difficulty in meeting customer demands; the risk that internal production capacity and that of contract manufacturers may be insufficient to meet customer demand or quality standards for our products; our ability to maintain effective information management systems and to successfully implement major systems initiatives; cyber-security incidents, including data security breaches or computer viruses; product performance issues and associated warranty claims; significant international operations and 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; potential difficulties in realigning global manufacturing capacity and capabilities among our global manufacturing facilities, including delays or challenges related to removing, transporting or reinstalling equipment, that may affect our ability to meet customer demands for products; possible future restructuring actions; possible future impairment charges for fixed or intangible assets, including goodwill; increased obligations under employee benefit plans; cost of protecting or defending intellectual property; changes in laws or regulations affecting us or the industries we serve; costs and challenges of compliance with domestic and foreign environmental laws and the effects of climate change; 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; our ability to attract and retain qualified key employees; allegations of health risks from wireless equipment; availability and adequacy of insurance; natural or man-made disasters or other disruptions; income tax rate variability and ability to recover amounts recorded as value-added tax receivables; labor unrest; risks of not realizing benefits from research and development projects; substantial indebtedness and maintaining compliance with debt covenants; our ability to incur additional indebtedness; ability of our lenders to fund borrowings under their credit commitments; changes in capital availability or costs, such as changes in interest rates, security ratings and market perceptions of the businesses in which we operate, or the ability to obtain capital on commercially reasonable terms or at all; our ability to generate cash to service our indebtedness; our ability to consummate the proposed acquisition (the "Acquisition") of TE Connectivity's Telecom, Enterprise and Wireless businesses (the "Business") on a timely basis or at all; risks associated with antitrust approval of the Acquisition; our ability to integrate the Business on a timely and cost effective manner; our reliance on TE Connectivity for transition services for some period of time after closing of the Acquisition; our ability to realize expected growth opportunities and cost savings from the Acquisition; and other factors beyond our control. These and other factors are discussed in greater detail in our 2014 Annual Report on Form 10-K. Although the information contained in this presentation represents our best judgment as of the date of this presentation based on information currently available and reasonable assumptions, we can give no assurance that the expectations will be attained or that any deviation will not be material. However, we are not undertaking any duty or obligation to update this information to reflect developments or information obtained after the date of this presentation.
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Consolidated Statements of Operations | |||||||||||||||||||
(Unaudited - In thousands, except per share amounts) | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
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2014 | 2013 | 2014 | 2013 | ||||||||||||||||
Net sales | $ | 827,895 | $ | 846,558 | $ | 3,829,614 | $ | 3,480,117 | |||||||||||
Operating costs and expenses: | |||||||||||||||||||
Cost of sales | 542,475 | 554,715 | 2,432,345 | 2,279,177 | |||||||||||||||
Selling, general and administrative | 129,376 | 147,457 | 484,891 | 502,275 | |||||||||||||||
Research and development | 29,543 | 30,879 | 125,301 | 126,431 | |||||||||||||||
Amortization of purchased intangible assets | 44,826 | 43,966 | 178,265 | 174,887 | |||||||||||||||
Restructuring costs, net | 7,590 | 5,671 | 19,267 | 22,104 | |||||||||||||||
Asset impairments | (2,133 | ) | 3,727 | 12,096 | 45,529 | ||||||||||||||
Total operating costs and expenses | 751,677 | 786,415 | 3,252,165 | 3,150,403 | |||||||||||||||
Operating income | 76,218 | 60,143 | 577,449 | 329,714 | |||||||||||||||
Other income (expense), net | 4,188 | (39,371 | ) | (86,405 | ) | (48,037 | ) | ||||||||||||
Interest expense | (36,526 | ) | (60,790 | ) | (178,935 | ) | (208,599 | ) | |||||||||||
Interest income | 1,345 | 847 | 4,954 | 3,107 | |||||||||||||||
Income (loss) before income taxes | 45,225 | (39,171 | ) | 317,063 | 76,185 | ||||||||||||||
Income tax benefit (expense) | 2,586 | 30,259 | (80,291 | ) | (56,789 | ) | |||||||||||||
Net income (loss) | $ | 47,811 | $ | (8,912 | ) | $ | 236,772 | $ | 19,396 | ||||||||||
Earnings (loss) per share: | |||||||||||||||||||
Basic | $ | 0.25 | $ | (0.05 | ) | $ | 1.27 | $ | 0.12 | ||||||||||
Diluted (a) | $ | 0.25 | $ | (0.05 | ) | $ | 1.24 | $ | 0.12 | ||||||||||
Weighted average shares outstanding: | |||||||||||||||||||
Basic | 187,738 | 177,725 | 186,905 | 160,641 | |||||||||||||||
Diluted (a) | 192,215 | 177,725 | 191,450 | 164,013 | |||||||||||||||
(a) Calculation of diluted earnings (loss) per share: | |||||||||||||||||||
Net income (loss) (basic) | $ | 47,811 | $ | (8,912 | ) | $ | 236,772 | $ | 19,396 | ||||||||||
Weighted average shares (basic) | 187,738 | 177,725 | 186,905 | 160,641 | |||||||||||||||
Dilutive effect of stock options | 4,477 | - | 4,545 | 3,372 | |||||||||||||||
Denominator (diluted) | 192,215 | 177,725 | 191,450 | 164,013 | |||||||||||||||
See notes to consolidated financial statements included in our Form 10-K. |
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Consolidated Balance Sheets | ||||||||
(In thousands, except share amounts) | ||||||||
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2014 | 2013 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 729,321 | $ | 346,320 | ||||
Accounts receivable, less allowance for doubtful accounts of
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612,007 | 607,489 | ||||||
Inventories, net | 367,185 | 372,187 | ||||||
Prepaid expenses and other current assets | 67,875 | 71,818 | ||||||
Deferred income taxes | 51,230 | 55,609 | ||||||
Total current assets | 1,827,618 | 1,453,423 | ||||||
Property, plant and equipment, net of accumulated depreciation of
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289,371 | 310,143 | ||||||
Goodwill | 1,451,887 | 1,450,506 | ||||||
Other intangible assets, net | 1,260,927 | 1,422,192 | ||||||
Other noncurrent assets | 126,082 | 97,791 | ||||||
Total assets | $ | 4,955,885 | $ | 4,734,055 | ||||
Liabilities and Stockholders' Equity | ||||||||
Accounts payable | $ | 177,806 | $ | 251,639 | ||||
Other accrued liabilities | 289,006 | 332,280 | ||||||
Current portion of long-term debt | 9,001 | 9,462 | ||||||
Total current liabilities | 475,813 | 593,381 | ||||||
Long-term debt | 2,698,724 | 2,505,090 | ||||||
Deferred income taxes | 339,945 | 386,527 | ||||||
Pension and postretirement benefit liabilities | 29,478 | 40,349 | ||||||
Other noncurrent liabilities | 104,306 | 120,692 | ||||||
Total liabilities | 3,648,266 | 3,646,039 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Preferred stock, |
— | — | ||||||
Common stock, |
1,888 | 1,868 | ||||||
Additional paid-in capital | 2,141,433 | 2,101,350 | ||||||
Retained earnings (accumulated deficit) | (741,519 | ) | (978,291 | ) | ||||
Accumulated other comprehensive loss | (83,548 | ) | (26,276 | ) | ||||
Treasury stock, at cost: 961,566 shares at |
(10,635 | ) | (10,635 | ) | ||||
Total stockholders' equity | 1,307,619 | 1,088,016 | ||||||
Total liabilities and stockholders' equity | $ | 4,955,885 | $ | 4,734,055 | ||||
See notes to consolidated financial statements included in our Form 10-K. |
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Consolidated Statements of Cash Flows | ||||||||||||||||||
(Unaudited -- In thousands) | ||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||
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2014 | 2013 | 2014 | 2013 | |||||||||||||||
Operating Activities: | ||||||||||||||||||
Net income (loss) | $ | 47,811 | $ | (8,912 | ) | $ | 236,772 | $ | 19,396 | |||||||||
Adjustments to reconcile net income (loss) to net cash generated by operating activities: |
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Depreciation and amortization | 60,638 | 72,751 | 259,504 | 256,616 | ||||||||||||||
Equity-based compensation | 5,361 | 3,451 | 21,092 | 16,108 | ||||||||||||||
Deferred income taxes | (1,747 | ) | (55,450 | ) | (33,278 | ) | (40,722 | ) | ||||||||||
Asset impairments | (2,133 | ) | 3,727 | 12,096 | 45,529 | |||||||||||||
Non-cash restructuring charges | 459 | 8,314 | 1,237 | 11,179 | ||||||||||||||
Excess tax benefits from equity-based compensation | (828 | ) | (220 | ) | (11,411 | ) | (229 | ) | ||||||||||
Changes in assets and liabilities: | ||||||||||||||||||
Accounts receivable | 80,821 | 34,900 | (18,824 | ) | (11,895 | ) | ||||||||||||
Inventories | 45,347 | (4,595 | ) | (4,324 | ) | (62,141 | ) | |||||||||||
Prepaid expenses and other current assets | (9,776 | ) | (11,691 | ) | 1,502 | (27,257 | ) | |||||||||||
Accounts payable and other accrued liabilities | (88,695 | ) | 57,030 | (109,922 | ) | 57,575 | ||||||||||||
Other noncurrent liabilities | (12,397 | ) | (1,620 | ) | (49,265 | ) | (21,944 | ) | ||||||||||
Other noncurrent assets | 9,089 | 1,855 | 715 | (3,060 | ) | |||||||||||||
Other | (6,164 | ) | (13,106 | ) | (16,476 | ) | (1,454 | ) | ||||||||||
Net cash generated by operating activities | 127,786 | 86,434 | 289,418 | 237,701 | ||||||||||||||
Investing Activities: | ||||||||||||||||||
Additions to property, plant and equipment | (12,051 | ) | (9,051 | ) | (36,935 | ) | (36,780 | ) | ||||||||||
Proceeds from sale of property, plant and equipment | 2,963 | 1,999 | 4,575 | 3,237 | ||||||||||||||
Cash paid for acquisitions | (1,620 | ) | — | (41,794 | ) | (55,770 | ) | |||||||||||
Proceeds from sales of businesses and long-term investments | 4,013 | 23,000 | 12,761 | 26,502 | ||||||||||||||
Cash paid for long-term investments | — | — | (15,000 | ) | (750 | ) | ||||||||||||
Other | 140 | — | 441 | 150 | ||||||||||||||
Net cash generated by (used in) investing activities | (6,555 | ) | 15,948 | (75,952 | ) | (63,411 | ) | |||||||||||
Financing Activities: | ||||||||||||||||||
Long-term debt repaid | (2,195 | ) | (702,580 | ) | (1,124,392 | ) | (907,817 | ) | ||||||||||
Long-term debt proceeds | 26 | 200,344 | 1,315,026 | 947,379 | ||||||||||||||
Net proceeds from the issuance of common stock | — | 433,958 | — | 433,958 | ||||||||||||||
Long-term debt financing costs | — | (1,433 | ) | (23,257 | ) | (14,560 | ) | |||||||||||
Dividends paid | — | — | — | (538,705 | ) | |||||||||||||
Cash paid to stock option holders | — | — | — | (11,295 | ) | |||||||||||||
Proceeds from the issuance of common shares under equity-based compensation plans |
1,305 | 1,174 | 12,052 | 1,174 | ||||||||||||||
Excess tax benefits from equity-based compensation | 828 | 220 | 11,411 | 229 | ||||||||||||||
Other | — | — | — | (32 | ) | |||||||||||||
Net cash generated by (used in) financing activities | (36 | ) | (68,317 | ) | 190,840 | (89,669 | ) | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | (8,308 | ) | 210 | (21,305 | ) | (2,676 | ) | |||||||||||
Change in cash and cash equivalents | 112,887 | 34,275 | 383,001 | 81,945 | ||||||||||||||
Cash and cash equivalents, beginning of period | 616,434 | 312,045 | 346,320 | 264,375 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 729,321 | $ | 346,320 | $ | 729,321 | $ | 346,320 | ||||||||||
See notes to consolidated financial statements included in our Form 10-K. |
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Reconciliation of GAAP Measures to Non-GAAP Adjusted Measures | ||||||||||||||||
(Unaudited -- In millions, except per share amounts) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
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2014 | 2013 | 2014 | 2013 | |||||||||||||
Operating income, as reported | $ | 76.2 | $ | 60.1 | $ | 577.4 | $ | 329.7 | ||||||||
Adjustments: | ||||||||||||||||
Amortization of purchased intangible assets | 44.8 | 44.0 | 178.3 | 174.9 | ||||||||||||
Restructuring costs, net | 7.6 | 5.7 | 19.3 | 22.1 | ||||||||||||
Equity-based compensation | 5.4 | 3.5 | 21.1 | 16.1 | ||||||||||||
Asset impairments | (2.1 | ) | 3.7 | 12.1 | 45.5 | |||||||||||
Transaction costs | 7.5 | 21.9 | 12.1 | 27.2 | ||||||||||||
Purchase accounting adjustments(1) | - | 0.5 | (11.9 | ) | 2.5 | |||||||||||
Adjustment of prior year warranty matter | - | 2.1 | - | 2.1 | ||||||||||||
Total adjustments to operating income | 63.2 | 81.4 | 231.0 | 290.4 | ||||||||||||
Non-GAAP adjusted operating income | $ | 139.4 | $ | 141.3 | $ | 808.4 | $ | 620.1 | ||||||||
Income before income taxes, as reported | $ | 45.2 | $ | (39.2 | ) | $ | 317.1 | $ | 76.2 | |||||||
Income tax expense, as reported | 2.6 | 30.3 | (80.3 | ) | (56.8 | ) | ||||||||||
Net income, as reported | $ | 47.8 | $ | (8.9 | ) | $ | 236.8 | $ | 19.4 | |||||||
Adjustments: | ||||||||||||||||
Total pretax adjustments to operating income | 63.2 | 81.4 | 231.0 | 290.4 | ||||||||||||
Pretax amortization of deferred financing costs & OID(2) | 3.2 | 15.1 | 32.4 | 26.6 | ||||||||||||
Pretax loss on debt transactions (3) | - | 34.4 | 93.9 | 34.4 | ||||||||||||
Pretax gain on sale of equity investment (3) | (3.5 | ) | - | (12.3 | ) | - | ||||||||||
Tax effects of adjustments and other tax items(4) | (38.0 | ) | (67.7 | ) | (155.1 | ) | (108.7 | ) | ||||||||
Non-GAAP adjusted net income | $ | 72.6 | $ | 54.1 | $ | 426.7 | $ | 262.1 | ||||||||
Diluted EPS, as reported | $ | 0.25 | $ | (0.05 | ) | $ | 1.24 | $ | 0.12 | |||||||
Non-GAAP adjusted diluted EPS | $ | 0.38 | $ | 0.30 | $ | 2.23 | $ | 1.60 | ||||||||
(1) For the year ended |
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(2) Included in interest expense. | ||||||||||||||||
(3) Included in other income (expense), net. | ||||||||||||||||
(4) 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 |
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Reconciliation of GAAP to Non-GAAP Adjusted Operating Income by Segment | ||||||||||||||||
(Unaudited -- In millions) | ||||||||||||||||
Year Ended |
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Wireless |
Enterprise |
Broadband |
Total |
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Operating income, as reported | $ | 468.1 | $ | 99.8 | $ | 9.5 | $ | 577.4 | ||||||||
Amortization of purchased intangible assets | 91.3 | 69.4 | 17.6 | 178.3 | ||||||||||||
Restructuring costs, net | 16.2 | 0.1 | 2.9 | 19.3 | ||||||||||||
Equity-based compensation | 11.7 | 6.7 | 2.7 | 21.1 | ||||||||||||
Asset impairments | 4.9 | - | 7.2 | 12.1 | ||||||||||||
Transaction costs | 7.6 | 3.0 | 1.5 | 12.1 | ||||||||||||
Purchase accounting adjustments | 0.6 | (12.5 | ) | - | (11.9 | ) | ||||||||||
Non-GAAP adjusted operating income | $ | 600.3 | $ | 166.6 | $ | 41.5 | $ | 808.4 | ||||||||
Non-GAAP adjusted operating margin | 24.3 | % | 19.6 | % | 8.1 | % | 21.1 | % | ||||||||
Year Ended |
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Wireless |
Enterprise |
Broadband |
Total |
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Operating income (loss), as reported | $ | 303.4 | $ | 66.7 | $ | (40.4 | ) | $ | 329.7 | |||||||
Amortization of purchased intangible assets | 88.1 | 68.4 | 18.4 | 174.9 | ||||||||||||
Restructuring costs, net | 24.3 | 5.1 | (7.3 | ) | 22.1 | |||||||||||
Equity-based compensation | 8.7 | 5.2 | 2.3 | 16.1 | ||||||||||||
Asset impairments | 9.4 | - | 36.2 | 45.5 | ||||||||||||
Transaction costs | 15.5 | 7.4 | 4.3 | 27.2 | ||||||||||||
Purchase accounting adjustments | - | 2.5 | - | 2.5 | ||||||||||||
Adjustment of prior year warranty matter | - | - | 2.1 | 2.1 | ||||||||||||
Non-GAAP adjusted operating income | $ | 449.4 | $ | 155.3 | $ | 15.4 | $ | 620.1 | ||||||||
Non-GAAP adjusted operating margin | 20.7 | % | 18.8 | % | 3.2 | % | 17.8 | % | ||||||||
Components may not sum to total due to rounding | ||||||||||||||||
See Description of Non-GAAP Financial Measures |
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Segment Information | ||||||||||||||||||||
(Unaudited -- In millions) | ||||||||||||||||||||
Sales by Segment | ||||||||||||||||||||
(Unaudited -- In millions) |
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% Change | ||||||||||||||||||||
Q4 2014 | Q3 2014 | Q4 2013 | Sequential | YOY | ||||||||||||||||
Wireless | $ | 484.8 | $ | 633.0 | $ | 533.7 | (23.4 | ) | % | (9.2 | ) | % | ||||||||
Enterprise | 212.5 | 218.0 | 205.2 | (2.5 | ) | % | 3.6 | % | ||||||||||||
Broadband | 130.6 | 149.5 | 109.1 | (12.6 | ) | % | 19.7 | % | ||||||||||||
Inter-segment eliminations | (0.1 | ) | (0.1 | ) | (1.4 | ) | N/A | N/A | ||||||||||||
Total Net Sales | $ | 827.9 | $ | 1,000.4 | $ | 846.6 | (17.2 | ) | % | (2.2 | ) | % | ||||||||
Non-GAAP Adjusted Operating Income by Segment | ||||||||||||||||||||
(Unaudited -- In millions) |
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% Change | ||||||||||||||||||||
Q4 2014 |
Q3 2014 |
Q4 2013 | Sequential | YOY | ||||||||||||||||
Wireless | $ | 84.0 | $ | 155.2 | $ | 111.9 | (45.9 | ) | % | (24.9 | ) | % | ||||||||
Enterprise | 42.5 | 44.5 | 32.4 | (4.5 | ) | % | 31.2 | % | ||||||||||||
Broadband | 12.9 | 18.8 | (3.0 | ) | (31.4 | ) | % | (530.0 | ) | % | ||||||||||
Total Non-GAAP Adjusted Operating Income | $ | 139.4 | $ | 218.5 | $ | 141.3 | (36.2 | ) | % | (1.3 | ) | % | ||||||||
Sales by Segment | ||||||||||||||||||||
% Change | ||||||||||||||||||||
2014 | 2013 | YOY | ||||||||||||||||||
Wireless | $ | 2,469.8 | $ | 2,174.2 | 13.6 | % | ||||||||||||||
Enterprise | 850.5 | 827.9 | 2.7 | % | ||||||||||||||||
Broadband | 511.1 | 484.6 | 5.5 | % | ||||||||||||||||
Inter-segment eliminations | (1.8 | ) | (6.6 | ) | N/A | |||||||||||||||
Total Net Sales | $ | 3,829.6 | $ | 3,480.1 | 10.0 | % | ||||||||||||||
Non-GAAP Adjusted Operating Income by Segment | ||||||||||||||||||||
% Change | ||||||||||||||||||||
2014 | 2013 | YOY | ||||||||||||||||||
Wireless | $ | 600.3 | $ | 449.4 | 33.6 | % | ||||||||||||||
Enterprise | 166.6 | 155.3 | 7.3 | % | ||||||||||||||||
Broadband | 41.5 | 15.4 | 169.5 | % | ||||||||||||||||
Total Non-GAAP Adjusted Operating Income | $ | 808.4 | $ | 620.1 | 30.4 | % | ||||||||||||||
Components may not sum to total due to rounding | ||||||||||||||||||||
See Description of Non-GAAP Financial Measures |
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Reconciliation of GAAP to Non-GAAP Adjusted Operating Income by Segment | ||||||||||||||||
(Unaudited -- In millions) | ||||||||||||||||
Fourth Quarter 2014 Non-GAAP Adjusted Operating Income Reconciliation by Segment | ||||||||||||||||
Wireless | Enterprise | Broadband | Total | |||||||||||||
Operating income, as reported | $ | 47.8 | $ | 21.5 | $ | 6.9 | $ | 76.2 | ||||||||
Amortization of purchased intangible assets | 23.1 | 17.4 | 4.4 | 44.8 | ||||||||||||
Restructuring costs, net | 7.5 | - | 0.1 | 7.6 | ||||||||||||
Equity-based compensation | 3.0 | 1.7 | 0.7 | 5.4 | ||||||||||||
Asset impairments | (2.1 | ) | - | - | (2.1 | ) | ||||||||||
Transaction costs | 4.7 | 1.9 | 0.9 | 7.5 | ||||||||||||
Non-GAAP adjusted operating income | $ | 84.0 | $ | 42.5 | $ | 12.9 | $ | 139.4 | ||||||||
Non-GAAP adjusted operating margin % | 17.3 | % | 20.0 | % | 9.9 | % | 16.8 | % | ||||||||
Third Quarter 2014 Non-GAAP Adjusted Operating Income Reconciliation by Segment | ||||||||||||||||
Wireless | Enterprise | Broadband | Total | |||||||||||||
Operating income, as reported | $ | 113.8 | $ | 25.3 | $ | 11.9 | $ | 151.0 | ||||||||
Amortization of purchased intangible assets | 23.2 | 17.3 | 4.3 | 44.8 | ||||||||||||
Restructuring costs, net | 5.9 | - | 1.6 | 7.4 | ||||||||||||
Equity-based compensation | 3.1 | 1.8 | 0.7 | 5.6 | ||||||||||||
Asset impairments | 7.0 | - | - | 7.0 | ||||||||||||
Transaction costs | 1.7 | 0.7 | 0.3 | 2.7 | ||||||||||||
Purchase accounting adjustments | 0.6 | (0.6 | ) | - | - | |||||||||||
Non-GAAP adjusted operating income | $ | 155.2 | $ | 44.5 | $ | 18.8 | $ | 218.5 | ||||||||
Non-GAAP adjusted operating margin % | 24.5 | % | 20.4 | % | 12.6 | % | 21.8 | % | ||||||||
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 | 22.0 | 17.4 | 4.6 | 44.0 | ||||||||||||
Restructuring costs, net | 14.4 | 4.6 | (13.3 | ) | 5.7 | |||||||||||
Equity-based compensation | 1.9 | 1.1 | 0.5 | 3.5 | ||||||||||||
Asset impairments | 3.7 | - | - | 3.7 | ||||||||||||
Transaction costs | 12.5 | 5.9 | 3.4 | 21.9 | ||||||||||||
Purchase accounting adjustments | - | 0.5 | - | 0.5 | ||||||||||||
Prior year warranty matter | - | - | 2.1 | 2.1 | ||||||||||||
Non-GAAP adjusted operating income (loss) | $ | 111.9 | $ | 32.4 | $ | (3.0 | ) | $ | 141.3 | |||||||
Non-GAAP adjusted operating margin % | 21.0 | % | 15.8 | % | -2.8 | % | 16.7 | % | ||||||||
Components may not sum to total due to rounding | ||||||||||||||||
See Description of Non-GAAP Financial Measures |
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Adjusted Cash Flow |
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(Unaudited -- In millions) |
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Adjusted Cash Flow |
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(Unaudited -- In millions) |
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Q4 2014 | Q4 2013 |
Full Year 2014 |
Full Year 2013 |
|||||||||||||
Cash flow from operations | $ | 127.8 | $ | 86.4 | $ | 289.4 | $ | 237.7 | ||||||||
Capital expenditures | (12.1 | ) | (9.1 | ) | (36.9 | ) | (36.8 | ) | ||||||||
Debt redemption premium | - | 33.0 | 93.9 | 33.0 | ||||||||||||
Fee paid to terminate management agreement | - | 20.2 | - | 20.2 | ||||||||||||
Adjusted Free Cash Flow | $ | 115.7 | $ | 130.5 | $ | 346.4 | $ | 254.1 |
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Quarterly Adjusted Operating Income and Adjusted EBITDA |
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(Unaudited - In millions) |
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GAAP to Non-GAAP Adjusted Operating Income and Adjusted EBITDA Reconciliation | ||||||||||||||||||||
(Unaudited -- In millions) |
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Q4 2014 | Q3 2014 | Q2 2014 | Q1 2014 | Q4 2013 | ||||||||||||||||
Operating income, as reported | $ | 76.2 | $ | 151.0 | $ | 203.7 | $ | 146.5 | $ | 60.1 | ||||||||||
Amortization of purchased intangible assets | 44.8 | 44.8 | 44.3 | 44.3 | 44.0 | |||||||||||||||
Restructuring costs, net | 7.6 | 7.4 | 2.3 | 2.0 | 5.7 | |||||||||||||||
Equity-based compensation | 5.4 | 5.6 | 6.5 | 3.7 | 3.5 | |||||||||||||||
Asset impairments | (2.1 | ) | 7.0 | 7.2 | - | 3.7 | ||||||||||||||
Transaction costs | 7.5 | 2.7 | 1.0 | 0.9 | 21.9 | |||||||||||||||
Purchase accounting adjustments | - | - | (6.4 | ) | (5.4 | ) | 0.5 | |||||||||||||
Adjustment of prior year warranty matter | - | - | - | - | 2.1 | |||||||||||||||
Non-GAAP adjusted operating income | $ | 139.4 | $ | 218.5 | $ | 258.5 | $ | 192.0 | $ | 141.3 | ||||||||||
Non-GAAP adjusted operating margin % | 16.8 | % | 21.8 | % | 24.2 | % | 20.5 | % | 16.7 | % | ||||||||||
Depreciation | 12.7 | 12.4 | 12.1 | 11.7 | 13.7 | |||||||||||||||
Non-GAAP adjusted EBITDA | $ | 152.0 | $ | 230.9 | $ | 270.6 | $ | 203.7 | $ | 155.1 | ||||||||||
Components may not sum to total due to rounding | ||||||||||||||||||||
See Description of NON-GAAP Financial Measures |
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