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UBS Technology and Services Conference June 8, 2009 NASDAQ : BBOX.

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UBS Technology and Services Conference June 8, 2009 NASDAQ: BBOX
Transcript

UBS Technology and Services Conference

June 8, 2009

NASDAQ: BBOX

Company Confidential

2

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

Company Confidential

4

Black Box Network Services

» The largest independent provider of major communications and infrastructure technologies

HotlineProducts

DataInfrastructure

VoiceCommunications

Company Confidential

5

A Global Company

192 offices in 141 countries

» Serving more than 85% of the Fortune 100

Company Confidential

6

Capabilities

$1 billion annual revenue

VoiceCommunications

60%

DataInfrastructure

19%

HotlineProducts

21%

Source: Company 2009 Form 10-K.Source: Company 2009 Form 10-K.

Company Confidential

7

Capabilities

Remote Monitoring Network SecurityVoice over IP Unified CommunicationsTraditional Telephony

Voice Communications Solutions: 60% of revenue

Company Confidential

8

Strategic Advantage: Our Communications Portfolio & Partners

• 25-year relationship• 2M ports on maintenance • 289 certifications• Coverage: U.S., Canada,

U.S. Federal Government

• 25-year relationship• 2M ports on maintenance • 289 certifications• Coverage: U.S., Canada,

U.S. Federal Government

• Relationships around the globe

• 325,000 ports on maintenance

• 133 certifications• Coverage: U.S.

• Relationships around the globe

• 325,000 ports on maintenance

• 133 certifications• Coverage: U.S.

No. 1 U.S. channel partner• 25-year relationship• 1M+ ports on maintenance• Over 1,000 certifications• Coverage: U.S.

No. 1 U.S. channel partner• 25-year relationship• 1M+ ports on maintenance• Over 1,000 certifications• Coverage: U.S.

• Leader in Pure IP Telephony• Added to portfolio in 2007• 11,500 ports on maintenance• Coverage: U.S., Canada, UK

and Australia

• Leader in Pure IP Telephony• Added to portfolio in 2007• 11,500 ports on maintenance• Coverage: U.S., Canada, UK

and Australia

• No. 1 channel partner in North America

• 700,000+ ports on maintenance

• 167 certifications• Coverage: U.S., Canada

• No. 1 channel partner in North America

• 700,000+ ports on maintenance

• 167 certifications• Coverage: U.S., Canada

Company Confidential

9

Capabilities

Networking Data CentersData NetworkingStructured Cabling Digital Signage, CATV & Video

Data Infrastructure Services: 19% of revenue

Company Confidential

10

Capabilities

Custom Solutions

Hotline Products: 21% of revenue

Cables Cabinets & RacksKVM Routers, Switches

Company Confidential

11

Start-to-Finish Services

Entrance Facility

Equipment Room

Telecommunications Room

Backbone

Desktop

Horizontal Cabling

» From the cable entry point to the desktop

» Inside-the-building experts

Company Confidential

12

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

Company Confidential

13

Key Objectives

• Deliver the highest quality technical support services and products to our clients around the world.

• Achieve operating margin and cash flow targets.

• Supplement organic growth with high quality M&A activities.

Mike McAndrew

Chief Financial Officer

Company Confidential

15

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 .

1515

Company Confidential

16

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 .

Company Confidential

17

Revenue Visibility

1Q09 2Q09 3Q09 4Q09

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

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

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

Company Confidential

18

Solid Sustainable Margins

$535

$721

$1,016 $1,017 $1,000 11.3%11.7%

10.6%10.6%

9.7%

$-

$200

$400

$600

$800

$1,000

$1,200

2005 2006 2007 2008 2009

Fiscal Year

Re

ve

nu

e (

M)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Ad

jus

ted

Op

era

tin

g In

co

me

P

erc

en

tag

e *

* See attached reconciliation* See attached reconciliationSource: Derived from Company data and Source: Derived from Company data and Company’s 2006 and 2009 Form 10-K .Company’s 2006 and 2009 Form 10-K .

Company Confidential

19

GAAP/Non-GAAP Reconciliation

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

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

Amortization of intangible assetson acquisitions 1 4 10 7 11 Stock-based compensation expense 5 11 9 3 3 Asset write-up depreciation expenseon acquisitions 2 2 3 2 2

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

Total pre-tax reconciling items 17 3.2% 29 4.1% 25 2.5% 23 2.3% 26 2.6%

Adjusted operating income 61$ 11.3% 84$ 11.7% 98$ 9.7% 108$ 10.6% 106$ 10.6%

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

FY 2009FY 2005 FY 2006 FY 2007 FY 2008

Source: Derived from Company data and Source: Derived from Company data and Company’s 2006 and 2009 Form 10-K .Company’s 2006 and 2009 Form 10-K .

Company Confidential

20

Consistent Positive Cash Flow

$52 $52

$37

$81

$72

$-

$10

$20

$30

$40

$50

$60

$70

$80

$90

2005 2006 2007 2008 2009

Fiscal Year

Ca

sh

flo

w f

rom

Op

era

tio

ns

(M

)

Source: Derived from Company data and Source: Derived from Company data and Company’s 2006 and 2009 Form 10-K .Company’s 2006 and 2009 Form 10-K .

Company Confidential

21

Balance Sheet Statistics

2005 2006 2007 2008 2009

DSO Days 57 54 53 55 53

Inventory Turns 6.4 7.3 7.2 7.1 8.5

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

Capex as % of Rev. 0.7% 0.6% 0.6% 0.3% 0.2%

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

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

Source: Derived from Company data and Source: Derived from Company data and Company’s 2006 and 2009 Form 10-K.Company’s 2006 and 2009 Form 10-K.

Company Confidential

22

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

Company Confidential

23

Liquidity

At March 31, 2009

• $24 million in cash

• $350 million syndicated line of credit» $248M drawn down

» Leverage ratio - 2.2, Covenant < 3.0

» Interest Coverage Ratio – 10.5, Covenant > 3.0

» Borrowing rate – LIBOR + .875% = 1.9%

» Expires January 2013

Company Confidential

24

Black Box Network Services (BBOX)

»Well-Diversified Revenues

»Solid, Sustainable Margins

»Consistent, Positive Cash Flow

NASDAQ: BBOX


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