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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.
Company Confidential
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Black Box Network Services
» The largest independent provider of major communications and infrastructure technologies
HotlineProducts
DataInfrastructure
VoiceCommunications
Company Confidential
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A Global Company
192 offices in 141 countries
» Serving more than 85% of the Fortune 100
Company Confidential
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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
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Capabilities
Remote Monitoring Network SecurityVoice over IP Unified CommunicationsTraditional Telephony
Voice Communications Solutions: 60% of revenue
Company Confidential
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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
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Capabilities
Networking Data CentersData NetworkingStructured Cabling Digital Signage, CATV & Video
Data Infrastructure Services: 19% of revenue
Company Confidential
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Capabilities
Custom Solutions
Hotline Products: 21% of revenue
Cables Cabinets & RacksKVM Routers, Switches
Company Confidential
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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
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Worldwide Market Size
Voice Communications $50B
Data Infrastructure 3B
Hotline Products 7B
Total Worldwide Market $60B
Communications and networking products and servicesCommunications and networking products and services
Company Confidential
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Key Objectives
• Deliver the highest quality technical support services and products to our clients around the world.
• Achieve operating margin and cash flow targets.
• Supplement organic growth with high quality M&A activities.
Company Confidential
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Well-Diversified Revenues
Revenue by
Industry
Source: Derived from Company data and Source: Derived from Company data and Company’s 2009 Form 10-K .Company’s 2009 Form 10-K .
1515
Company Confidential
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Well-Diversified RevenuesRevenue by
Geography
Revenue by
Client Size
Revenue by
Client Type
Source: Derived from Company data and Source: Derived from Company data and Company’s 2009 Form 10-K .Company’s 2009 Form 10-K .
Company Confidential
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Revenue Visibility
1Q09 2Q09 3Q09 4Q09
6 month Backlog (in millions) 158$ 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
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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
$1,200
2005 2006 2007 2008 2009
Fiscal Year
Re
ve
nu
e (
M)
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Ad
jus
ted
Op
era
tin
g In
co
me
P
erc
en
tag
e *
* See attached reconciliation* See attached reconciliationSource: Derived from Company data and Source: Derived from Company data and Company’s 2006 and 2009 Form 10-K .Company’s 2006 and 2009 Form 10-K .
Company Confidential
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GAAP/Non-GAAP Reconciliation
% of % of % of % of % of$ 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
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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
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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
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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
Company Confidential
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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
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Black Box Network Services (BBOX)
»Well-Diversified Revenues
»Solid, Sustainable Margins
»Consistent, Positive Cash Flow