BBOX CC Summary:
Seeing next Q flat with this Q. No details. Rev, EPS amd cash flow the same.
Generated 29 mil in free cash flow.
Not seeing any economic recovery as has been detailed in the press.
Customers: Walmart, First Union, Kinko. Utilicorp
In 12 countries:
85 percent of business is local, 15 percent national and international. Hoping to expand to more national and international business
Able to maintain gross margins by cutting head count to match revenue levels. Cut 500 people in the Q.
Have a furlow program if we see demand is low but will pick up going forward. Only cut people if no near term recovery is expected.
New York and Seattle offices are especially depressed. [Harry: Not sure what is going on in Seattle except the generally bad economy.]
Stable rev curve in Oct and Nov. Dec usually down due to holidays.
Dec (Q3) usually down from Q2 due to holidays.
Average order size the same all year. No reduction in pricing. 92 to 93 per of business due to repeat business. IT spending is down overall, so it reflects the existing customer base spending less overall. So average order not down but the number of orders is less.
Target, Walmart, Home Depot, Best Buy, Kinko, Utilicorp. national accounts. Business is flat to up Q-Q. Just starting Walmart. Have 46 people focused on this market. Looking for 1/2 dozen new customers. Each is worth 15 to 20 mil per year.
Wireless and wired on-site business. Less than 10 percent is wireless. Wireless is a growth opportunity, but needs the right opportunity. Applications are limited right now. Speed and relibility are still a issue. Behind every wireless application is a wired back infrastructure to support it.
Split between service and equipment sales in on-site business.? Typical don't break out service and equipment on a quote. Usually 60 percent service and 40 percent equipment. Prices have held pretty well. Have pockets of challenges in New York and Seattle. In these two markets pricing is an issue as there are aggressive competitors.
Catalog business still 1/2 of business. Good margins. Focusing marketing the last few years.
Competitve landscape in on-site business. No change.
On-site rev Q3 105 mil, Q2 117 mil.
Nature of IT spending re-bound, given that most of customers have reduced staff. Don't thimk we will miss opportunities by reducing our own staff. No idea on timing. Seeing more outsourcing when the re-bound comes.
[Harry: In general corporate infrastructure demand is still weak. BBOX tends to not favor one equipment vendor over another in terms of installation. Increase in demand on the corporate side is what is necessary to derive demand on the carrier side. Given the weak demand I don't see much T1/T3/E1 growth. The flat guidance indicates some sort of botom may be in place, but the market still does not suggest any up tick in demand.] |
