Black Box Reports Fourth Quarter Fiscal 2018 Results

Black Box Corporation (NASDAQ:BBOX) reported its fourth quarter results along with results for its full year period ended March 31, 2018.

The company which is a leading digital solutions provider dedicated to helping customers design, build and secure IT infrastructure reported that its revenues declined by US$14.2 million or 6.8 percent to US$194 million as compared to prior year period.

As quoted in the press release:

Fourth Quarter Results

• Gross profit margin was 27.3%, down 80 basis points from 28.1% for the same period last year.  This decrease was primarily due to a decline in our higher margin legacy unified communication business and lower margin incremental projects in both our Products and Services segments during this quarter. The gross profit margin in the prior quarter was 27.0%.
• The Company recorded a $9.7 million non-cash asset impairment charge related to the write down of intangible assets as a result of its annual impairment assessment.
• Net loss was $51.0 million, compared to a net loss of $1.8 million for the same period last year and compared to a net loss of $27.9 million in the prior quarter.
• Cash flow used for operating activities was $3.5 million, compared to cash flow provided by operating activities of $15.2 million for the same period last year and compared to cash flow used by operating activities of $27.5 million in the prior quarter. The variance compared to the prior quarter was principally due to improved working capital management.

Year to Date Results

• Revenues were $774.6 million, down 9.5% from $855.7 million for the prior year.
• Gross profit margin was 27.7%, down 70 basis points from 28.4% last year.  The decrease was primarily due to a decline in our higher margin legacy unified communication business and lower margin project work in our commercial services business within North America Services.
• Selling, general and administrative expenses were $241.4 million, up 3.0% from $234.4 million last year. The increase was primarily due to higher spending on the U.S.-based ERP project, partially offset by lower variable compensation costs.
• Loss before income taxes was $52.3 million, compared to a loss before income taxes of $5.3 million for the same period last year.

“I have spent the last few weeks visiting with customers and hearing about the critical and valued services we are providing,” stated Joel Trammell, President and CEO.  “I have assured them as well as our vendors and employees that we have many work streams in process that are intended to restore the profitability and financial health of Black Box. Our Credit Agreement Amendment was only step one.  The sale of our Federal Business will be step two.  As mentioned in our Form 10-K, the next steps include plans to potentially restructure, refinance and/or sell additional assets.  Of course, during this time, we are also working to improve the operating profitability and cash flow of our Company.”

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