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CommScope reports third quarter 2020 results

CommScope Holding Company, Inc., a global leader in connectivity solutions for communications networks, reported results for the quarter ended September 30, 2020.

“Since joining CommScope in October, I have been impressed by the team’s relentless focus on executing against our strategic objectives and delivering for our customers around the world,” said Chuck Treadway, president and chief executive officer. “Communication networks are essential to our economies, education system and for keeping us connected on a personal level. I couldn’t be happier to be a part of a company providing such critical network connectivity.

“As we look ahead, the Board and management team are focused on growing our business and creating long-term, profitable growth through a combination of investment opportunities and cost-cutting measures. While there remains much to do, we are confident in our ability to deliver enhanced profitability and unlock even greater value for CommScope and our shareholders. I am excited for CommScope to continue to play a critical role in advancing the 5G and 10G revolutions and shaping our global networks, today and in the future.”

Alex Pease, executive vice president and chief financial officer, said, “While we continue to expect that the current macroeconomic uncertainty will persist in the near-term, we are focused on balancing actions to improve our financial performance and flexibility. We will continue to aggressively manage expenses and reduce costs where possible. At the same time, we will make strategic investments, such as adding fiber cabling and connectivity capacity, that position the company to unlock growth opportunities for the business.”

Third Quarter Results and Comparison
Reconciliations of the reported GAAP results to non-GAAP adjusted segment results can be found at

Net sales in the third quarter of 2020 decreased 8.9% year over year to $2.17 billion. Net sales declined primarily due to year over year decreases in the Home Networks and Outdoor Wireless Networks segments.

CommScope generated a net loss of $(116.3) million, or $(0.66) per basic share, in the third quarter, compared to the prior year period’s net loss of $(156.5) million, or $(0.88) per basic share. Non-GAAP adjusted net income for the third quarter of 2020 was $123.1 million, or $0.51 per diluted share, versus $126.9 million, or $0.55 per diluted share, in the third quarter of 2019.

Non-GAAP adjusted EBITDA decreased 7.5% to $341.9 million compared to the same period last year.

Non-GAAP adjusted EBITDA improved to 15.8% of net sales compared to 15.5% of net sales in the third quarter of 2019. The Company estimates that third-quarter 2020 non-GAAP adjusted EBITDA was negatively impacted by approximately $10 million related to COVID-19 incremental costs.

Broadband Networks
• Net sales of $820.9 million, increased 18.1% from prior year driven by growth in Network Cable & Connectivity and Network & Cloud.

Home Networks
• Net sales of $563.6 million, down 31.8% from prior year driven by declines in Home Media Solutions, while Broadband Connectivity Devices remained relatively flat.

Outdoor Wireless Networks
• Net sales of $271.8 million, down 18.7% from prior year driven by declines in both Macro Tower Solutions and Metro Cell Solutions.

Venue and Campus Networks
• Net sales of $511.8 million, down 2.4% from prior year primarily driven by declines in Indoor Copper Enterprise. Results were partially offset by growth in Distributed Coverage and Capacity Solutions and RUCKUS Networks business.

Cash Flow and Balance Sheet
• GAAP cash flow from operations of $172.2 million.
• Non-GAAP adjusted free cash flow was $176.0 million after adjusting operating cash flow for $25.8 million of additions to property, plant and equipment, $24.8 million of cash paid for restructuring costs and $4.8 million of cash paid for transaction and integration costs.
• Ended the quarter with $582.8 million in cash and cash equivalents.
• As of September 30, 2020, the Company had no outstanding borrowings under its asset-based revolving credit facility and had availability of $733.6 million, after giving effect to borrowing base limitations and outstanding letters of credit. The Company has total liquidity of approximately $1.32 billion.
• Redeemed $100 million aggregate principal amount of the 2025 Notes during the third quarter with an additional $100 million aggregate principal of the 2025 Notes redeemed during October 2020.
CT Bureau

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