Black Box Corporation 12 th Annual Needham Growth Stock Conference January 14, 2010

Black Box Corporation

12th Annual NeedhamGrowth Stock Conference

January 14, 2010

Company Confidential

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Black Box Network Services

• Forward-Looking Statements - Any forward-looking statements contained in this presentation are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and speak only as of the date of this presentation. You can identify these forward-looking statements by the fact that they use words such as "should," "anticipate," "estimate," "approximate," "expect," "target," "may," "will," "project," "intend," "plan," "believe" and other words of similar meaning and expression in connection with any discussion of future operating or financial performance. Forward-looking statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. Risk factors are included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2009 and our other filings with the Securities and Exchange Commission (the “SEC”). We can give no assurance that any goal, plan or target set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. We undertake no obligation to release publicly any revisions to forward-looking statements as a result of future events or developments.

• GAAP Reconciliation -This presentation also includes, as a supplement to United States Generally Accepted Accounting Principles (“GAAP”), certain non-GAAP financial measures. These non-GAAP financial measures exclude the impact of certain items and, therefore, have not been calculated in accordance with GAAP. Pursuant to the requirements of the SEC’s Regulation G, we provide in our SEC filings additional information regarding these non-GAAP financial measures, including a reconciliation of them to their most comparable GAAP financial measures, management’s explanations regarding the use and usefulness of non-GAAP financial measures and the limitations associated with the use of non-GAAP financial measures. The Company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measurements, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.

Terry Blakemore

President and CEO


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Company Highlights

Financially Strong and Stable• Public company (NASDAQ: BBOX) since 1994

• $1 billion in annual revenue

• Double digit margins

• Positive cash flow for 32 consecutive years

A Robust Company• 194 offices Worldwide• 4,500+ team members• 2,500+ technicians• 175,000+ clients• 4,000,000+ ports under maintenance

• Servicing over 85 of the Fortune 100

Black Box is the leading independent provider of major communications and infrastructure technologies


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Black Box Corporation

Voice Communications Services

Data Infrastructure Services

Hotline Networking Products

Services to plan, design, install and maintain the underlying infrastructure for communications networks

Remote and on-site services to plan, design, install, monitor and manage voice and data communications systems

Sales and support of networking products and refurbished phones and cards


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Capabilities

Remote Monitoring Network SecurityVoice over IP Unified CommunicationsTraditional Telephony

Voice Communications Solutions: 60% of revenue


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Strategic Advantage: Our Communications Portfolio & Partners

• Top 3 Channel Partner• 25-year relationship• 2M+ ports on maintenance • Coverage: U.S., Canada,

U.S. Federal Government – worldwide coverage

• Top 3 Channel Partner• 25-year relationship• 2M+ ports on maintenance • Coverage: U.S., Canada,

U.S. Federal Government – worldwide coverage

• Relationships around the globe

• 500,000 ports on maintenance

• Coverage: U.S.

• Relationships around the globe

• 500,000 ports on maintenance

• Coverage: U.S.

• No. 1 U.S. channel partner • 25-year relationship• 1M+ ports on maintenance• Coverage: U.S.

• No. 1 U.S. channel partner • 25-year relationship• 1M+ ports on maintenance• Coverage: U.S.

• Leader in Pure IP Telephony• 20,000 ports on maintenance• Coverage: U.S., Canada, UK

and Australia

• Leader in Pure IP Telephony• 20,000 ports on maintenance• Coverage: U.S., Canada, UK

and Australia

• No. 1 channel partner in North America

• 700,000+ ports on maintenance

• Coverage: U.S., Canada

• Jan 2010 – Added New reseller territory (Australia, New Zealand, UK, France, Italy, Germany, Mexico)

• No. 1 channel partner in North America

• 700,000+ ports on maintenance

• Coverage: U.S., Canada

• Jan 2010 – Added New reseller territory (Australia, New Zealand, UK, France, Italy, Germany, Mexico)

• New agreement announced November 20, 2009 as Silver Partner Status

• January 2010 moved to Platinum Partner status

• Coverage: U.S., Canada, Mexico

• New agreement announced November 20, 2009 as Silver Partner Status

• January 2010 moved to Platinum Partner status

• Coverage: U.S., Canada, Mexico


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Market Share

Cisco, 23.5%

Avaya, 15.2%

Nortel, 15.0%NEC, 8.5%

Mitel, 7.5%

Toshiba, 3.7%

ShoreTel, 2.1%

Others, 22.5%

Enterprise Line Shipments, North America, 2008

Source: Market Share: Enterprise Telephony Equipment, Worldwide, 2008 Gartner (March, 2009)

Siemens, ~1.9%


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Capabilities

Networking Data CentersData NetworkingStructured Cabling Digital Signage, CATV & Video

Data Infrastructure Services: 19% of revenue


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Capabilities

Custom Solutions

Hotline Products: 21% of revenue

Cables Cabinets & RacksKVM Routers, Switches


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Worldwide Market Size

Voice Communications $50B

Data Infrastructure 3B

Hotline Products 7B

Total Worldwide Market $60B

Communications and networking products and servicesCommunications and networking products and services

Source: Derived from data provided by Source: Derived from data provided by Gartner and other industry analyses.Gartner and other industry analyses.


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Our clients include:


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Client Spotlight


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Client Opportunity

Our view of how our clients see the market today

• Black Box is uniquely positioned to work independently and as a single point-of-contact among telcos, systems integrators and manufacturers• Black Box’s team has the right mix of skills to support advanced communications at all stages of the communications lifecycle

» Telcos vs. System Integrators vs. Manufacturers and Their Channel Partners

– Confusing relationships – Overlap in services and responsibilities

– Need a single point of contact

» Increasingly Complex Communications Technology Requires Higher Degree of Specialization

– Customers need a partner that can integrate multiple, complex technologies with business strategy– Customers need a partner with the flexibility to support, augment or entirely outsource communications

resources


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Black Box Solution

Promises made and kept to meet our customers’ needs

Consultative Approach Technical Expertise Experience• 33 years of proven results• Entrusted to drive

communications strategy• Strong leadership• Diverse and long-term customer

base

• Comprehensive portfolio• Vendor independent• Understands interoperability• Single point-of-contact• Planning for future

development

• Breadth of knowledge • Single-source provider• 2,500+ certified technicians• 7 NOCs, 24/7 support• Keeping clients abreast of

technology advancements

Black Box’s consultative approach, technical expertise and experience enable us to fill gaps in the operational and strategic communications needs of our customers – TODAY AND INTO THE FUTURE !

Mike McAndrew

Chief Financial Officer


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Well-Diversified Revenues

Revenue by

Industry

Source: Derived from Company data and Source: Derived from Company data and Company’s 2009 Form 10-K .Company’s 2009 Form 10-K .


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Well-Diversified RevenuesRevenue by

Geography

Revenue by

Client Size

Revenue by

Client Type

Source: Derived from Company data and Source: Derived from Company data and Company’s 2009 Form 10-K .Company’s 2009 Form 10-K .


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Revenue Visibility

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

6 month Backlog (in millions) 158$ 196$ 195$ 194$ 210$ 207$

Maintenance Revenue as a % of total Revenue 21% 21% 23% 24% 23% 23%

Backlog represents expected revenue related to executed client purchase orders or contracts that are estimated to be complete within 180 days of quarter end.

Source: Derived from Company data and Company’s Source: Derived from Company data and Company’s 2009 Form 10-K and 9/30/09 form 10Q.2009 Form 10-K and 9/30/09 form 10Q.

Solid Sustainable Margins

$535

$721

$467

$1,017$1,016 $1,00010.4% 10.2%

9.5%

10.3%10.3%

8.7%

$-

$200

$400

$600

$800

$1,000

$1,200

2005 2006 2007 2008 2009 6 Mos. 2010

Fiscal Year

Rev

enue

(M)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Adj

uste

d O

pera

ting

Inco

me

Perc

enta

ge *

* See attached reconciliation* See attached reconciliationSource: Derived from Company data and Company’s Source: Derived from Company data and Company’s 2009 Form 10-K and 9/30/09 form 10Q.2009 Form 10-K and 9/30/09 form 10Q.


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GAAP/Non-GAAP Reconciliation

% of % of % of % of % of % of$ Rev. $ Rev. $ Rev. $ Rev. $ Rev. $ Rev.

Operating income 43$ 8.1% 55$ 7.6% 73$ 7.2% 85$ 8.3% 80$ 8.0% 30$ 6.4%Non-cash reconciling items

Amortization of intangible assetson acquisitions 1 4 10 7 11 6 Asset write-up depreciation expenseon acquisitions 2 2 3 2 2 -

Cash reconciling itemsEmployee severance and facilityconsolidation costs 5 5 - - 9 2 Acquisition integration costs - - 2 9 - - Historical stock option grantingpractices investigation and - - 1 1 1 4 related matters cost409A expenses - - - 1 - - Other 5 7 - - - 2

Total pre-tax reconciling items 13 2.3% 18 2.5% 16 1.5% 20 2.0% 23 2.3% 14 3.0%

Adjusted operating income 56$ 10.4% 73$ 10.2% 89$ 8.7% 105$ 10.3% 103$ 10.3% 44$ 9.5%

Annual Revenue 535$ 721$ 1,016$ 1,017$ 1,000$ 467$

6 Mos. 2010FY 2005 FY 2006 FY 2007 FY 2008 FY 2009



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Consistent Positive Cash Flow

$30

$52 $52

$37

$81

$72

$-

$10

$20

$30

$40

$50

$60

$70

$80

$90

2005 2006 2007 2008 2009 6 Mos. 2010

Fiscal Year

Cas

h f

low

fro

m O

per

atio

ns

(M)



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Balance Sheet Statistics

2005 2006 2007 2008 2009

6 mos.

2010

DSO Days 57 54 53 55 53 51

Inventory Turns 6.4 7.3 7.2 7.1 8.5 8.4

Capex (M) $3.5 $4.1 $5.9 $3.2 $2.2 $1.0

Capex as % of Rev.

0.7% 0.6% 0.6% 0.3% 0.2% 0.2%

Headcount 3,371 3,295 4,581 4,313 4,542 4,335

Debt / Equity .3 to 1 .2 to 1 .4 to 1 .3 to 1 .4 to 1 .4 to 1



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Liquidity

At September 30, 2009

• $24 million in cash

• $350 million syndicated line of credit» $221M drawn down

» Leverage ratio - 2.4, Covenant < 3.0

» Interest Coverage Ratio – 9.1, Covenant > 3.0

» Borrowing rate – LIBOR + .875% = 1.4%

» Expires January 2013


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Business Framework

• Operating Margin Percentage» Flexible cost structure, revenue visibility

• Operating Margin Dollar Growth» Contribution

• DSO» Operating CF focus, balance sheet strength

• Revenue Growth» Markets, clients, M&A


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Black Box Network Services (BBOX)

»Well-Diversified Revenues

»Solid, Sustainable Margins

»Consistent, Positive Cash Flow

NASDAQ: BBOX

Black Box Corporation 12 th Annual Needham Growth Stock Conference January 14, 2010

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Transcript of Black Box Corporation 12 th Annual Needham Growth Stock Conference January 14, 2010