QUOTE AND NEWS
SeekingAlpha  Aug 4  Comment 
ByMartin Vlcek: Black Box Corporation, Inc. (NASDAQ:BBOX) reported uninspiring Q1 FY2015 results (SEC filing, earnings call, press release). The company delivered revenue of 245M, a 3% increase Q/Q and down 1% Y/Y but at the high end of its own...
SeekingAlpha  Jul 11  Comment 
ByMartin Vlcek: Black Box Corporation (BBOX) is one of the world's largest independent provider of communications, infrastructure, product and service solutions for IT needs of businesses and institutions around the world, with primary focus on...
Cloud Computing  Jun 26  Comment 
Black Box Corporation (NASDAQ:BBOX), a leading technology solutions provider, announced today that it has added Cisco® Powered Managed Business Video Services to its portfolio and renewed its Cisco® Master Service...
DailyFinance  Jun 16  Comment 
Black Box Corporation (NASDAQ:BBOX), a leading technology solutions provider, announced today it has joined the HDBaseT Alliance (http://www.HDBaseT.org/) at the Adopter level. HDBaseT Adopters have access to finalized ...
DailyFinance  Apr 4  Comment 
Black Box Corporation (NASDAQ:BBOX), a leading technology solutions provider, announced today that it has expanded broadcast video functionality for its advanced digital KVM matrix solution (DKM). By using modular SFP...
StreetInsider.com  Feb 10  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Dividends/Black+Box+Corp+%28BBOX%29+Declares+%240.09+Quarterly+Dividend%3B+1.4%25+Yield/9143645.html for the full story.
StreetInsider.com  Jan 28  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/Black+Box+Corp+%28BBOX%29+Tops+Q3+EPS+by+3c/9096714.html for the full story.
StreetInsider.com  Nov 11  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Dividends/Black+Box+Corp.+%28BBOX%29+Declares+%240.09+Quarterly+Dividend%3B+1.4%25+Yield/8869129.html for the full story.
StreetInsider.com  Oct 29  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/Black+Box+Corp+%28BBOX%29+Misses+Q2+EPS+by+4c%3B+Issues+Mixed+Outlook/8822317.html for the full story.
StreetInsider.com  Aug 12  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Dividends/Black+Box+Corp+%28BBOX%29+Declares+%240.09+Quarterly+Dividend%3B+1.3%25+Yield/8590714.html for the full story.




 
TOP CONTRIBUTORS

Corporation Summary

Black Box Corporation, founded in 1976, is a communications and infrastructure services provider. Black Box has grown significantly since its roots as a technology product catalog and is now integrated into 141 countries world-wide. Black Box is dedicated to providing the best technological products now and into the future.

Brief History

1976 - Founded as Expandor, INC

1982 - Changed name to Black Box Corporation

1992 - Issued first IPO

1994 - Black Box launches website

2007 - Black Box exceeds 1 billion in revenue [1]

Stock and Reporting Highlights

Black Box Corporation is traded as BBOX on the NASDAQ stock exchange

Black Box runs on Fiscal Year April 1st through March 31st

Current dividends for BBOX are $.06 per share quarterly, pending approval[2]

Marketing Strategy

Price

Black Box prides itself as having among the lowest prices across the industry. Black Box provides a service where they will match prices on non-customized products if a competitors quote shows a lower price. Black Box also incorporates same-day shipping on over 95% of their products to ensure premium service to clients.[3]

Place

Currently, Black Box operates in over 141 countries world-wide. This allows for Black Box to have a competetive edge over the industry by maintaining a local feel all over the world. By having operations in so many countries, Black Box can maintain on-site teams for many of their clients whether it be the Middle East or central Africa. [4]

Promotion

In order to promote their products, Black Box utilizes an extensive and award winning catalog. In addition, Black Box has a fully compatible, on-line marketplace for purchasing their products along with on-site teams worldwide.

Product

Currently Black Box offers over 118,000 products. The product mix ranges from items such as infrastructural hardware to networking devices falling under three main categories: Voice, Data, and Hotline Services. Voice services domniate BBOX's sales at over 60%, but for the most part sales are equally distributed. This equal distribution of sales shows product strength and helps BBOX compete with many of their biggest competitors. In addition to their wide variety of products, Black Box offers a full array of IT solutions to its clients including communication and infrastructure. Black Box has numerous, on-site teams that help install and service existing clients with their products. Black Box also contains a full portfolio of products and services that cater to local and state governments. [5]

Porter's Five Forces

  • Threat of New Entrants

In the Networking and Communication Device industry, there is a large threat of new entrants. The need for for this industry is exponentially growing as the whole world continues to globalize and more areas become technologically advanced. New players in the industry such as Riverbed Technology show that there is a piece of the market for new entrants and they can be successful.

  • Bargaining Power of Suppliers

Bargaining power of suppliers is very high for Black Box. With such a large global presence, BBOX must be able to have products available to be shipped around the world, and in many cases already on-site. If suppliers of raw materials are to raise prices, BBOX would not be able to search for a new supplier and keep up with demand. With such a small market cap, a company like BBOX does not have much bargaining power with suppliers. Competitors within the industry have much higher levels of sales and therefor intake more products from similar suppliers. This leaves BBOX with the lower level of bargaining power.

  • Bargaining Power of Customers

Customers of the Networking and Communication Device industry have a medium amount of buying power. The overall size of the market is so large that companies using this industries products have many options to choose from and can easily shop around. However, once a company already has a product from this industry, they more than likely have integrated the products company wide. This helps to insure client retention within the industry and gives some power to companies such as Black Box, Cisco Systems, Riverbed Technology and Juniper Networks.

  • Threat of Substitutes

Threat of substitutes for Black Box's products and services can be low in the short-term but high in the long term. In the short term, most customers will still have demand for voice service and phone systems. In the long term, however, customers may increasingly switch to data-network-based systems for voice services and reduces demand for Black Box's traditional products. However, once a client has integrated a certain company into their infrastructure, it is very unlikely that they will begin using other companies products. If Black Box can leverage on its relations with existing customers and build up its strength in the data network service markets, then the threat of substitutes can be averted.

  • Competetive Rivalry

Competetive rivalry within the Networking and Communication Device industry is extremely high. Despite a growing market place, there is room for new entrants and many players in the industry are continuing to grow. As many of the biggest companies worldwide adapt their technology, the demand for this industry should increase accordingly. Many of the industry leaders will fight to emerge as the premier networking and communication device provider.

Competitors/Industry Comparison

Competitors

Cisco Systems (CSCO) - Cisco, in terms of size, is BBOX's biggest competitor with a market cap of $93.64B. Cisco is a designer and manufacturer of many communication and IT related products such as networking devices, routers, firewall software, etc. Competition with Cisco is difficult for BBOX due to the large market share that Cisco has with sales of $40B. BBOX to figure out how to best build value for its products so that it may steal Cisco's market share. By producing superior products and continuing to expand their clientele, BBOX will make itself a true competitor to Cisco. [6]

Juniper Networks (JNPR) - Juniper is the second largest competitor in the network & communication device industry with a market cap of $24.55B. Juniper designs, develops and sells products related to IP networking, networking infrastructure, technical assistance and IT hardware. Juniper offers its products mainly through a sales force, but also through various retail mediums. Juniper has many similar target clients to BBOX and a large way that the two companies can compete is through their sales medium. BBOX uses an extensive on-line catalog for the majority of its sales which some potential clients may favor over a sales force or retailer. [7]

Riverbed Technology (RVBD) - Riverbed is a mid sized competitor of BBOX with a market cap of $5.41B. Riverbed's main product lines are designed to help with IT performance and speed. The main product lines are Steelhead appliances which use Riverbed's RiOS software. Riverbed has clients from small offices to large corporations across the world. Riverbed is a relatively new competitor in the industry and is not even a ten year old corporation. As a young player in the industry, Riverbed poses as fresh competition in the market place to Black Box. BBOX may have an advantage competitivly rooted in historic performance and product quality since both companies target the same type of clients. [8]

Financial Comparisons

Image:EVEBITDA.jpg [9]

BBOX, for its industry, is a very cheap stock. The graph below illustrates such. BBOX's EV/EBITDA ratio is just under 1.1 higher than the lowest company in the industry (Cisco Systems). When looking at the industry as a whole it is obvious that many company's stocks are over-priced. Juniper's EV/EBITDA ratio is quite alarming at 19.47 and Riverbed's ratio is indicative of an extremely overpriced stock. This gives great positioning for BBOX within the industry. Although BBOX's lower valuation may partly reflect its focus on voice service vs. the faster-growing data service markets, its lower valuation provides a margin of safety for investors and its stock has greater potential for price appreciation, especially when many of its competitors are having a hard time establishing their worth.


Image:BBOXFISCAL2010RATIOS.jpg[10]


Black Box, when compared to competitors, is not generating profit at industry levels. Both profit margin and operating margin are industry lows and can be seen as a point of concern. BBOX is not doing a good job at turning sales into actual dollars and are losing a lot of money in associated costs. These inneficient operations should be a cause of concern, but could also lead to much higher net income if the sales process is smoothed out.

In addition, Black Box is struggling to generate income from both assets and equity. Mean while, competitors within the industry all have higher ROA and ROE ratios. CSCO is the lone standout when it comes to generating returns on equity at 17.38%.

The current ratio for Black Box may seem as a concern when looking at the industry, but due to low levels of the debt BBOX is alright for the time being. Having low amounts of cash on hand is dangerous for a company of such age, but as BBOX continues to expand they will have large amounts of cash expenditures.

The bright spot for Black Box is the fact that their inventory turnover levels are right on par with competitors. Black Box could even continue to improve on this ratio, especially as they continue to acquire new clients in the United States and Abroad

Financial Metrics

Capital Structure

BBOX currently finances its operations with primarily equity at an almost 3:2 ratio. Competitor CSCO currently operates right around 1:1 while RVBD operates at 4:1. It is beneficial for a smaller company such as BBOX to operate with more equity as they will pay out less in interest expense and can create a bigger return for stockholders.

Image:BBOXCAPITAL.jpg [11]

SWOT Analysis

  • Strengths
A cover of Black Box's Catalog
A cover of Black Box's Catalog

CommScope Center of Excellence - The CommScope Center of Excellence shows immense strength of Black Box. CommScope is one of BBOX's biggest product lines and this center will help with growth and support to further its effectiveness. CommScope is a leading technology communications company whose products and solutions are available through BBOX. By having this virtual center, BBOX is guaranteeing consumers of the product line full support and a wholy beneficial experience with the products. The center was recently awared Elite status by the CommScope BusinessPartner program. This center, along with the symbiotic relationship between CommScope and BBOX, will ensure the growth of the CommScope business line. [12]

Global Presence - Black Box currently houses offices in over 140 countries world-wide which service an approximate 175,000 clients. As the business world continues to globalize, it is essential for BBOX to expand accordingly. By having such a diverse amount of locations, BBOX can easily service its numerous clients who too have expanded globally. One specific example is the opening of a new office in South Korea.[13] The office which will be known as Black Box Korea, will help capture and fulfill the needs of the growing northeast Asian technology sector. BBOX currently operates in South Korea but in association with the U.S. Military. This new office will hopefully pave the way for an even stronger BBOX representation in all of the Asian marketplace.


Catalog - The catalog is the bread and butter of Black Box. First introduced in 1977, the original catalog contained only nine items resulting in revenue of $175,000. Today the Black Box catalog contains over 118,000 items having resulted in over $1B in revenue. There is also an on-line version of the catalog to make BBOX's products even more available. In 2005 the catalog was named "Catalog of the Year" for the second straight year by Multichannel Merchant. Such a comprehensive catalog truly helps BBOX offer an easy platform to view products for new and existing clients. A catlog of this nature is not readily available by most competitors. [14]

  • Weaknesses

Low market cap - As far as the industry goes, Black Box has an extremely low market cap at just about 609.5M. Industry leader Cisco Systems has a market cap of over $93B, and even smaller competitors such as Riverbed and Aruba Networks both have market caps of over $3B. Such a small market cap for BBOX makes it difficult to compete in shear scope of the market place. Such large competitors can hinder growth for Black Box by crowding out the total market volume for the industry.

Recent dip in revenues - For any company in any industry in this slumping economy, decreased revenues do not bode well for potential investors. Revenues have steadily declined since 2008 at about $200,000 per year. Conversely, major competitors Cisco and Juniper have actually seen a steady increase in revenue over this time period. Also alarming is the dip in net income that BBOX incurred from 2009 to 2010 which was close to $11M. [15]

Global Operations - Currently Black Box operate in over 141 countries worldwide, but recieves only 14% of its revenue from foreign market places. These global offices can be seen as highly inefficient and wasteful from the standpoint of overhead. BBOX must find a way to increase their global revenue in order to justify their global presence to shareholders. [16]

  • Opportunities

Black Box's opportunities lie within their world-wide integration. The exponentially growing technology sector of the world-wide market place poses a large growth opportunity for BBOX. Their worldwide integration gives them a foothold in many of these emerging marketplaces and easy access to the marketplace. As of now, BBOX receives the majority of its revenue from the United States at over 80%. With the many offices that operate around the world, BBOX should have the ability to increase global sales over time. This lack of market penetration could be seen as a weakness, but with the globalizing market place, BBOX must secure their foothold.

In addition, Black Box must make sure to continue to have speedy service and offer quality products and solutions to all potential clients. As more and more companies are becoming dependent on IT integration, the possibility of acquiring new clients increases too.

Black Box holds another opportunity with their biggest client type, governments. With over 25% of their sales coming from government institutions, Black Box is guaranteeing consistent revenue. As world-wide governments continue to expand and continue to become more technologically integrated, this only opens more opportunites for BBOX. If BBOX can continue to present there value, they may incorporate further with government clients and may even gain notice from other large companies working with governments.


  • Threats

The biggest threat to Black Box is the size and number of major competitors. As mentioned above, a market cap of under $1B does not give BBOX nearly as much room to operate in the marketplace as their competitors.

The benefits of BBOX's international presence also carries some potentially large risks. Black Box operates in many countries which have seen large disasters (Japan, Sri Lanka) and areas of much political and military unrest (Middle East, northern and western Africa). Operating in these areas can pose threats to not only BBOX locations, but also to their client base.

Corporate Governance

Below is a table containing the top officers at Black Box. Note that each of these officers have been with Black Box for over 10 years showing strong internal promotion.

Image:BlackBox.jpg [17]

References

  1. [1]
  2. [2]
  3. [3]
  4. [4]
  5. [5]
  6. [6]
  7. [7]
  8. [8]
  9. [9]
  10. [10]
  11. [11]
  12. [12]
  13. [13]
  14. [14]
  15. [15]
  16. [16]
  17. [17]
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki