☒
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
||||||
For the quarterly period ended December 31, 2017
|
||||||||
OR
|
||||||||
☐
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
||||||
For the transition period from ________ to ________
|
||||||||
|
||||||||
Commission File Number: 001-38028
|
Delaware
|
|
|
|
47-2398593
|
(State or other jurisdiction of
incorporation or organization)
|
|
|
|
(I.R.S. Employer
Identification Number)
|
☐
|
|
Large accelerated filer
|
|
|
|
☐
|
|
Accelerated filer
|
☒
|
|
Non-accelerated filer
|
(Do not check if a smaller reporting company)
|
|
☐
|
|
Smaller reporting company
|
|
☐
|
|
Emerging growth company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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||
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||
|
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||
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||
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|
||
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||
|
|
|
As of
June 30, 2017 |
|
As of
December 31, 2017 |
||||
Assets
|
|
|
|
|
||||
Current Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
27.5
|
|
|
$
|
20.7
|
|
Accounts receivable, net
|
|
576.3
|
|
|
547.5
|
|
||
Unbilled accounts receivable, net
|
|
159.8
|
|
|
194.5
|
|
||
Financing receivables, current portion
|
|
84.2
|
|
|
82.2
|
|
||
Inventory
|
|
27.7
|
|
|
29.9
|
|
||
Prepaid expenses and other current assets
|
|
63.4
|
|
|
63.5
|
|
||
Total current assets
|
|
938.9
|
|
|
938.3
|
|
||
Property and equipment, net
|
|
32.1
|
|
|
34.1
|
|
||
Financing receivables, less current portion
|
|
113.6
|
|
|
113.3
|
|
||
Goodwill
|
|
781.5
|
|
|
784.1
|
|
||
Identifiable intangible assets, net
|
|
751.9
|
|
|
719.0
|
|
||
Other assets
|
|
32.7
|
|
|
33.0
|
|
||
Total assets
|
|
$
|
2,650.7
|
|
|
$
|
2,621.8
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
||||
Current Liabilities
|
|
|
|
|
||||
Current maturities of long-term debt
|
|
$
|
—
|
|
|
$
|
—
|
|
Accounts payable – trade
|
|
350.5
|
|
|
433.2
|
|
||
Accounts payable – floor plan
|
|
264.9
|
|
|
199.6
|
|
||
Accrued expenses and other current liabilities
|
|
216.3
|
|
|
190.8
|
|
||
Discounted financing receivables, current portion
|
|
79.9
|
|
|
77.7
|
|
||
Total current liabilities
|
|
911.6
|
|
|
901.3
|
|
||
Long-term debt, net of debt issuance costs and current maturities
|
|
730.7
|
|
|
684.3
|
|
||
Discounted financing receivables, less current portion
|
|
104.7
|
|
|
99.0
|
|
||
Deferred income tax liabilities
|
|
270.4
|
|
|
181.6
|
|
||
Other liabilities
|
|
30.4
|
|
|
26.8
|
|
||
Total liabilities
|
|
2,047.8
|
|
|
1,893.0
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
|
||||
Stockholders’ Equity
|
|
|
|
|
||||
Preferred stock:
|
|
|
|
|
||||
$0.01 par value; 100 shares authorized and zero shares issued and outstanding at December 31, 2017 and June 30, 2017
|
|
—
|
|
|
—
|
|
||
Common stock:
|
|
|
|
|
||||
$0.01 par value; 250,000,000 shares authorized, 91,821,644 shares issued and outstanding at December 31, 2017 and 90,969,919 shares issued and outstanding at June 30, 2017
|
|
0.9
|
|
|
0.9
|
|
||
Additional paid-in capital
|
|
625.3
|
|
|
632.3
|
|
||
Retained earnings (accumulated deficit)
|
|
(23.3
|
)
|
|
95.6
|
|
||
Total stockholders’ equity
|
|
602.9
|
|
|
728.8
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
2,650.7
|
|
|
$
|
2,621.8
|
|
|
|
Three months ended December 31,
|
|
Six months ended December 31,
|
||||||||||||
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
||||||||
Product
|
|
$
|
612.2
|
|
|
$
|
540.3
|
|
|
$
|
1,238.6
|
|
|
$
|
1,168.9
|
|
Service
|
|
109.6
|
|
|
121.3
|
|
|
220.9
|
|
|
257.7
|
|
||||
Total revenue
|
|
721.8
|
|
|
661.6
|
|
|
1,459.5
|
|
|
1,426.6
|
|
||||
Cost of revenue
|
|
|
|
|
|
|
|
|
||||||||
Product
|
|
491.5
|
|
|
431.6
|
|
|
991.0
|
|
|
929.7
|
|
||||
Service
|
|
87.4
|
|
|
92.6
|
|
|
177.0
|
|
|
203.2
|
|
||||
Total cost of revenue
|
|
578.9
|
|
|
524.2
|
|
|
1,168.0
|
|
|
1,132.9
|
|
||||
Gross margin
|
|
142.9
|
|
|
137.4
|
|
|
291.5
|
|
|
293.7
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Selling expenses
|
|
66.6
|
|
|
65.3
|
|
|
134.1
|
|
|
130.7
|
|
||||
General and administrative expenses
|
|
25.8
|
|
|
26.0
|
|
|
52.8
|
|
|
51.7
|
|
||||
Transaction costs
|
|
2.6
|
|
|
1.7
|
|
|
6.0
|
|
|
2.1
|
|
||||
Depreciation and amortization
|
|
20.4
|
|
|
21.1
|
|
|
40.8
|
|
|
41.7
|
|
||||
Total operating expenses
|
|
115.4
|
|
|
114.1
|
|
|
233.7
|
|
|
226.2
|
|
||||
Operating income
|
|
27.5
|
|
|
23.3
|
|
|
57.8
|
|
|
67.5
|
|
||||
Interest and other (income) expense
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
20.9
|
|
|
12.7
|
|
|
41.6
|
|
|
25.2
|
|
||||
Loss on extinguishment of debt
|
|
0.8
|
|
|
0.7
|
|
|
0.8
|
|
|
1.4
|
|
||||
Other (income) expense, net
|
|
0.1
|
|
|
(0.1
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
||||
Total interest and other (income)
expense
|
|
21.8
|
|
|
13.3
|
|
|
42.5
|
|
|
26.5
|
|
||||
Income before income taxes
|
|
5.7
|
|
|
10.0
|
|
|
15.3
|
|
|
41.0
|
|
||||
Income tax expense (benefit)
|
|
2.3
|
|
|
(89.2
|
)
|
|
6.3
|
|
|
(77.9
|
)
|
||||
Net income
|
|
$
|
3.4
|
|
|
$
|
99.2
|
|
|
$
|
9.0
|
|
|
$
|
118.9
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.05
|
|
|
$
|
1.08
|
|
|
$
|
0.13
|
|
|
$
|
1.30
|
|
Diluted
|
|
$
|
0.05
|
|
|
$
|
1.03
|
|
|
$
|
0.12
|
|
|
$
|
1.23
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
71,937,504
|
|
|
91,712,178
|
|
|
71,934,986
|
|
|
91,440,895
|
|
||||
Diluted
|
|
74,769,907
|
|
|
96,678,815
|
|
|
74,624,390
|
|
|
96,504,207
|
|
|
|
Six months ended
December 31, 2016 |
|
Six months ended
December 31, 2017 |
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
9.0
|
|
|
$
|
118.9
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
||||
Amortization of intangible assets
|
|
36.8
|
|
|
37.2
|
|
||
Depreciation of property and equipment in operating expenses
|
|
4.0
|
|
|
4.5
|
|
||
Depreciation of property and equipment in cost of revenue
|
|
2.8
|
|
|
2.9
|
|
||
Provision for sales returns and credit losses
|
|
1.4
|
|
|
0.9
|
|
||
Amortization of debt issuance costs
|
|
3.4
|
|
|
2.6
|
|
||
Loss on extinguishment of debt
|
|
0.8
|
|
|
1.4
|
|
||
Noncash lease income
|
|
(1.7
|
)
|
|
(2.2
|
)
|
||
Share-based compensation expense
|
|
1.0
|
|
|
2.6
|
|
||
Deferred income tax benefit
|
|
(9.3
|
)
|
|
(88.9
|
)
|
||
Other
|
|
0.2
|
|
|
0.1
|
|
||
Change in assets and liabilities, net of acquisitions and dispositions:
|
|
|
|
|
||||
Unbilled and accounts receivable
|
|
(49.1
|
)
|
|
(4.6
|
)
|
||
Inventory
|
|
8.3
|
|
|
(2.2
|
)
|
||
Prepaid expenses and other assets
|
|
(18.1
|
)
|
|
0.4
|
|
||
Accounts payable – trade
|
|
75.3
|
|
|
80.7
|
|
||
Accrued expenses and other liabilities
|
|
18.5
|
|
|
(29.7
|
)
|
||
Net cash provided by operating activities
|
|
83.3
|
|
|
124.6
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Acquisition of businesses, net of cash and cash equivalents acquired
|
|
—
|
|
|
(9.5
|
)
|
||
Proceeds from collection of escrow related to acquisition of business
|
|
0.6
|
|
|
0.2
|
|
||
Additions of equipment under sales-type and direct financing leases
|
|
(63.9
|
)
|
|
(49.7
|
)
|
||
Proceeds from collection of financing receivables
|
|
7.7
|
|
|
2.2
|
|
||
Additions to equipment under operating leases
|
|
(0.8
|
)
|
|
(1.2
|
)
|
||
Proceeds from disposition of equipment under operating leases
|
|
0.5
|
|
|
0.7
|
|
||
Purchases of property and equipment
|
|
(6.7
|
)
|
|
(7.2
|
)
|
||
Net cash used in investing activities
|
|
(62.6
|
)
|
|
(64.5
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from issuance of common stock under share-based compensation plans
|
|
0.1
|
|
|
4.5
|
|
||
Proceeds from the discounting of financing receivables
|
|
66.1
|
|
|
47.0
|
|
||
Retirements of discounted financing receivables
|
|
(4.3
|
)
|
|
(2.5
|
)
|
||
Net repayments on the receivables securitization facility
|
|
(5.0
|
)
|
|
—
|
|
||
Deferred financing costs
|
|
—
|
|
|
(0.6
|
)
|
||
Repayments of term loans
|
|
(28.7
|
)
|
|
(50.0
|
)
|
||
Net change in accounts payable — floor plan
|
|
(36.4
|
)
|
|
(65.3
|
)
|
||
Net cash used in financing activities
|
|
(8.2
|
)
|
|
(66.9
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
12.5
|
|
|
(6.8
|
)
|
||
Cash and cash equivalents:
|
|
|
|
|
||||
Beginning of the period
|
|
33.0
|
|
|
27.5
|
|
||
End of the period
|
|
$
|
45.5
|
|
|
$
|
20.7
|
|
Supplemental disclosures of cash flow information
|
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
|
||||
Interest
|
|
$
|
37.4
|
|
|
$
|
22.6
|
|
Income taxes, net of refunds
|
|
$
|
1.7
|
|
|
$
|
22.9
|
|
Reduction of discounted lease assets and liabilities
|
|
$
|
43.6
|
|
|
$
|
55.1
|
|
|
|
Preferred stock
|
|
Common stock
|
|
Additional
paid-in
capital
|
|
Retained earnings (accumulated deficit)
|
|
Total
|
||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||
Balance, June 30, 2017
|
|
—
|
|
|
$
|
—
|
|
|
90,969,919
|
|
|
$
|
0.9
|
|
|
$
|
625.3
|
|
|
$
|
(23.3
|
)
|
|
$
|
602.9
|
|
Common stock issued
under share-based
compensation plans
|
|
—
|
|
|
—
|
|
|
851,725
|
|
|
—
|
|
|
4.4
|
|
|
—
|
|
|
4.4
|
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118.9
|
|
|
118.9
|
|
|||||
Share-based compensation
expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
2.6
|
|
|||||
Balance, December 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
91,821,644
|
|
|
$
|
0.9
|
|
|
$
|
632.3
|
|
|
$
|
95.6
|
|
|
$
|
728.8
|
|
|
|
June 30, 2017
|
|
December 31, 2017
|
||||
Partner incentive program receivable
|
|
$
|
26.2
|
|
|
$
|
23.2
|
|
Prepaid income taxes
|
|
—
|
|
|
4.6
|
|
||
Deferred product costs and other current assets
|
|
37.2
|
|
|
35.7
|
|
||
Total prepaid expenses and other current assets
|
|
$
|
63.4
|
|
|
$
|
63.5
|
|
|
|
Discounted to
financial institutions
|
|
Not discounted to
financial institutions
|
|
Total
|
||||||
Financing receivables:
|
|
|
|
|
|
|
||||||
Minimum lease payments
|
|
$
|
197.2
|
|
|
$
|
4.2
|
|
|
$
|
201.4
|
|
Estimated net residual values
|
|
—
|
|
|
7.2
|
|
|
7.2
|
|
|||
Unearned income
|
|
(9.4
|
)
|
|
(0.8
|
)
|
|
(10.2
|
)
|
|||
Provision for credit losses
|
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|||
Total, net
|
|
$
|
187.8
|
|
|
$
|
10.0
|
|
|
$
|
197.8
|
|
Reported as:
|
|
|
|
|
|
|
||||||
Current
|
|
$
|
80.8
|
|
|
$
|
3.4
|
|
|
$
|
84.2
|
|
Long-term
|
|
107.0
|
|
|
6.6
|
|
|
113.6
|
|
|||
Total, net
|
|
$
|
187.8
|
|
|
$
|
10.0
|
|
|
$
|
197.8
|
|
Discounted financing receivables:
|
|
|
|
|
|
|
||||||
Nonrecourse
|
|
$
|
183.7
|
|
|
$
|
—
|
|
|
$
|
183.7
|
|
Recourse
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
183.7
|
|
|
$
|
—
|
|
|
$
|
183.7
|
|
Reported as:
|
|
|
|
|
|
|
||||||
Current
|
|
$
|
79.3
|
|
|
$
|
—
|
|
|
$
|
79.3
|
|
Long-term
|
|
104.4
|
|
|
—
|
|
|
104.4
|
|
|||
Total
|
|
$
|
183.7
|
|
|
$
|
—
|
|
|
$
|
183.7
|
|
|
|
Discounted to
financial institutions
|
|
Not discounted to
financial institutions
|
|
Total
|
||||||
Financing receivables:
|
|
|
|
|
|
|
||||||
Minimum lease payments
|
|
$
|
198.4
|
|
|
$
|
2.3
|
|
|
$
|
200.7
|
|
Estimated net residual values
|
|
—
|
|
|
6.8
|
|
|
6.8
|
|
|||
Unearned income
|
|
(10.8
|
)
|
|
(0.8
|
)
|
|
(11.6
|
)
|
|||
Provision for credit losses
|
|
—
|
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|||
Total, net
|
|
$
|
187.6
|
|
|
$
|
7.9
|
|
|
$
|
195.5
|
|
Reported as:
|
|
|
|
|
|
|
||||||
Current
|
|
$
|
79.8
|
|
|
$
|
2.4
|
|
|
$
|
82.2
|
|
Long-term
|
|
107.8
|
|
|
5.5
|
|
|
113.3
|
|
|||
Total, net
|
|
$
|
187.6
|
|
|
$
|
7.9
|
|
|
$
|
195.5
|
|
Discounted financing receivables:
|
|
|
|
|
|
|
||||||
Nonrecourse
|
|
$
|
175.8
|
|
|
$
|
—
|
|
|
$
|
175.8
|
|
Recourse
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
175.8
|
|
|
$
|
—
|
|
|
$
|
175.8
|
|
Reported as:
|
|
|
|
|
|
|
||||||
Current
|
|
$
|
77.0
|
|
|
$
|
—
|
|
|
$
|
77.0
|
|
Long-term
|
|
98.8
|
|
|
—
|
|
|
98.8
|
|
|||
Total
|
|
$
|
175.8
|
|
|
$
|
—
|
|
|
$
|
175.8
|
|
|
|
June 30, 2017
|
|
December 31, 2017
|
||||
Equipment under operating leases
|
|
$
|
4.6
|
|
|
$
|
3.6
|
|
Accumulated depreciation
|
|
(2.9
|
)
|
|
(1.5
|
)
|
||
Total equipment under operating leases, net
|
|
$
|
1.7
|
|
|
$
|
2.1
|
|
|
|
June 30, 2017
|
|
December 31, 2017
|
||||
Discounted operating leases:
|
|
|
|
|
||||
Current
|
|
$
|
0.7
|
|
|
$
|
0.6
|
|
Noncurrent
|
|
0.2
|
|
|
0.2
|
|
||
Total
|
|
$
|
0.9
|
|
|
$
|
0.8
|
|
|
|
Estimated
useful lives
|
|
June 30, 2017
|
|
December 31, 2017
|
||||
Furniture and fixtures
|
|
3 to 7 years
|
|
$
|
5.3
|
|
|
$
|
5.6
|
|
Equipment
|
|
3 to 7 years
|
|
22.2
|
|
|
27.5
|
|
||
Software
|
|
3 years
|
|
19.9
|
|
|
21.9
|
|
||
Leasehold improvements
|
|
Life of lease
|
|
13.3
|
|
|
14.3
|
|
||
Total property and equipment
|
|
|
|
60.7
|
|
|
69.3
|
|
||
Accumulated depreciation and amortization
|
|
|
|
(28.6
|
)
|
|
(35.2
|
)
|
||
Total property and equipment, net
|
|
|
|
$
|
32.1
|
|
|
$
|
34.1
|
|
|
|
Range of life
(years)
|
|
Gross amount
|
|
Accumulated
amortization
|
|
Total, net
|
||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
|
||||||
Customer relationships
|
|
5 – 10
|
|
$
|
703.2
|
|
|
$
|
(159.8
|
)
|
|
$
|
543.4
|
|
Developed technology
|
|
5
|
|
3.6
|
|
|
(1.6
|
)
|
|
2.0
|
|
|||
Trade names
|
|
2
|
|
5.1
|
|
|
(3.6
|
)
|
|
1.5
|
|
|||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
||||||
Trade names
|
|
Indefinite
|
|
205.0
|
|
|
—
|
|
|
205.0
|
|
|||
Total intangible assets
|
|
|
|
$
|
916.9
|
|
|
$
|
(165.0
|
)
|
|
$
|
751.9
|
|
|
|
Range of life
(years)
|
|
Gross amount
|
|
Accumulated
amortization
|
|
Total, net
|
||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
|
||||||
Customer relationships
|
|
5 – 10
|
|
$
|
707.0
|
|
|
$
|
(195.2
|
)
|
|
$
|
511.8
|
|
Developed technology
|
|
5
|
|
3.6
|
|
|
(1.9
|
)
|
|
1.7
|
|
|||
Trade names
|
|
1 – 2
|
|
5.6
|
|
|
(5.1
|
)
|
|
0.5
|
|
|||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
||||||
Trade names
|
|
Indefinite
|
|
205.0
|
|
|
—
|
|
|
205.0
|
|
|||
Total intangible assets
|
|
|
|
$
|
921.2
|
|
|
$
|
(202.2
|
)
|
|
$
|
719.0
|
|
|
Years ending June 30,
|
||
2018 (remaining six months)
|
$
|
36.4
|
|
2019
|
71.9
|
|
|
2020
|
71.7
|
|
|
2021
|
71.1
|
|
|
2022
|
71.1
|
|
|
2023 and thereafter
|
191.8
|
|
|
Total
|
$
|
514.0
|
|
|
|
June 30, 2017
|
|
December 31, 2017
|
||||
Accrued compensation
|
|
$
|
64.5
|
|
|
$
|
56.4
|
|
Accrued interest
|
|
11.7
|
|
|
11.5
|
|
||
Accrued equipment purchases/vendor expenses
|
|
78.3
|
|
|
62.5
|
|
||
Accrued income taxes
|
|
7.3
|
|
|
—
|
|
||
Accrued non-income taxes
|
|
7.4
|
|
|
10.2
|
|
||
Customer deposits
|
|
5.1
|
|
|
3.4
|
|
||
Unearned revenue
|
|
40.0
|
|
|
44.6
|
|
||
Other accrued expenses and current liabilities
|
|
2.0
|
|
|
2.2
|
|
||
Total accrued expenses and other current liabilities
|
|
$
|
216.3
|
|
|
$
|
190.8
|
|
|
|
June 30, 2017
|
|
December 31, 2017
|
||||
Revolving credit facility
|
|
$
|
—
|
|
|
$
|
—
|
|
Receivables securitization facility
|
|
—
|
|
|
—
|
|
||
Term loan facility, due February 2022
|
|
626.6
|
|
|
576.6
|
|
||
Senior notes, 10.25% due February 2023
|
|
125.0
|
|
|
125.0
|
|
||
Total long-term debt
|
|
751.6
|
|
|
701.6
|
|
||
Unamortized debt issuance costs
|
|
(20.9
|
)
|
|
(17.3
|
)
|
||
Total long-term debt, net of debt issuance costs
|
|
$
|
730.7
|
|
|
$
|
684.3
|
|
Reported as:
|
|
|
|
|
||||
Current
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term
|
|
730.7
|
|
|
684.3
|
|
||
Total long-term debt, net of debt issuance costs
|
|
$
|
730.7
|
|
|
$
|
684.3
|
|
|
|
|
|
Fair value measurement
|
||||||||||||
|
|
Carrying value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Term loans
|
|
$
|
626.6
|
|
|
$
|
—
|
|
|
$
|
627.4
|
|
|
$
|
—
|
|
Senior notes
|
|
125.0
|
|
|
—
|
|
|
138.8
|
|
|
—
|
|
||||
Total
|
|
$
|
751.6
|
|
|
$
|
—
|
|
|
$
|
766.2
|
|
|
$
|
—
|
|
|
|
|
|
Fair value measurement
|
||||||||||||
|
|
Carrying value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Term loans
|
|
$
|
576.6
|
|
|
$
|
—
|
|
|
$
|
578.0
|
|
|
$
|
—
|
|
Senior notes
|
|
125.0
|
|
|
—
|
|
|
135.7
|
|
|
—
|
|
||||
Total
|
|
$
|
701.6
|
|
|
$
|
—
|
|
|
$
|
713.7
|
|
|
$
|
—
|
|
|
|
Three months ended December 31,
|
|
Six months ended December 31,
|
||||||||||||
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Selling expenses
|
|
$
|
0.2
|
|
|
$
|
0.3
|
|
|
$
|
0.4
|
|
|
$
|
0.7
|
|
General and administrative expenses
|
|
0.3
|
|
|
1.4
|
|
|
0.6
|
|
|
1.9
|
|
||||
Total
|
|
$
|
0.5
|
|
|
$
|
1.7
|
|
|
$
|
1.0
|
|
|
$
|
2.6
|
|
|
|
Three months ended December 31,
|
|
Six months ended December 31,
|
||||||||||||
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Earnings
|
|
$
|
3.4
|
|
|
$
|
99.2
|
|
|
$
|
9.0
|
|
|
$
|
118.9
|
|
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares – basic
|
|
71,937,504
|
|
|
91,712,178
|
|
|
71,934,986
|
|
|
91,440,895
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
Share-based awards
|
|
2,832,403
|
|
|
4,966,637
|
|
|
2,689,404
|
|
|
5,063,312
|
|
||||
Weighted-average shares – diluted
|
|
74,769,907
|
|
|
96,678,815
|
|
|
74,624,390
|
|
|
96,504,207
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.05
|
|
|
$
|
1.08
|
|
|
$
|
0.13
|
|
|
$
|
1.30
|
|
Diluted
|
|
$
|
0.05
|
|
|
$
|
1.03
|
|
|
$
|
0.12
|
|
|
$
|
1.23
|
|
|
|
Three months ended December 31,
|
|
Six months ended December 31,
|
||||||||
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||
Share-based awards excluded from EPS because of anti-dilution
|
|
482,220
|
|
|
1,949,689
|
|
|
482,220
|
|
|
1,949,689
|
|
Share-based awards excluded from EPS because performance or market condition had not been met
(1)
|
|
3,503,554
|
|
|
—
|
|
|
3,503,554
|
|
|
—
|
|
Total share-based awards excluded from
EPS
|
|
3,985,774
|
|
|
1,949,689
|
|
|
3,985,774
|
|
|
1,949,689
|
|
|
|
Three months ended December 31,
|
|
Six months ended December 31,
|
||||||||||||
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Cloud
|
|
$
|
136.4
|
|
|
$
|
108.9
|
|
|
$
|
248.1
|
|
|
$
|
244.4
|
|
Security
|
|
69.8
|
|
|
85.3
|
|
|
136.5
|
|
|
194.3
|
|
||||
Digital Infrastructure
|
|
515.6
|
|
|
467.4
|
|
|
1,074.9
|
|
|
987.9
|
|
||||
Total revenue
|
|
$
|
721.8
|
|
|
$
|
661.6
|
|
|
$
|
1,459.5
|
|
|
$
|
1,426.6
|
|
Condensed Consolidating Balance Sheet
|
||||||||||||||||
As of June 30, 2017
|
||||||||||||||||
|
||||||||||||||||
|
|
Presidio, Inc.
|
|
Presidio Holdings Inc. & Subsidiaries
|
|
Intercompany Adjustments
|
|
Consolidated
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Current Assets
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$
|
0.7
|
|
|
$
|
26.8
|
|
|
$
|
—
|
|
|
$
|
27.5
|
|
Accounts receivable, net
|
|
—
|
|
|
576.3
|
|
|
—
|
|
|
576.3
|
|
||||
Unbilled accounts receivable, net
|
|
—
|
|
|
159.8
|
|
|
—
|
|
|
159.8
|
|
||||
Financing receivables, current portion
|
|
—
|
|
|
84.2
|
|
|
—
|
|
|
84.2
|
|
||||
Inventory
|
|
—
|
|
|
27.7
|
|
|
—
|
|
|
27.7
|
|
||||
Prepaid expenses and other current assets
|
|
1.3
|
|
|
69.1
|
|
|
(7.0
|
)
|
|
63.4
|
|
||||
Total current assets
|
|
2.0
|
|
|
943.9
|
|
|
(7.0
|
)
|
|
938.9
|
|
||||
Property and equipment, net
|
|
—
|
|
|
32.1
|
|
|
—
|
|
|
32.1
|
|
||||
Deferred tax asset
|
|
2.7
|
|
|
—
|
|
|
(2.7
|
)
|
|
—
|
|
||||
Financing receivables, less current portion
|
|
—
|
|
|
113.6
|
|
|
—
|
|
|
113.6
|
|
||||
Goodwill
|
|
—
|
|
|
781.5
|
|
|
—
|
|
|
781.5
|
|
||||
Identifiable intangible assets, net
|
|
—
|
|
|
751.9
|
|
|
—
|
|
|
751.9
|
|
||||
Other assets
|
|
605.2
|
|
|
32.7
|
|
|
(605.2
|
)
|
|
32.7
|
|
||||
Total assets
|
|
$
|
609.9
|
|
|
$
|
2,655.7
|
|
|
$
|
(614.9
|
)
|
|
$
|
2,650.7
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
||||||||
Current Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Accounts payable – trade
|
|
—
|
|
|
350.5
|
|
|
—
|
|
|
350.5
|
|
||||
Accounts payable – floor plan
|
|
—
|
|
|
264.9
|
|
|
—
|
|
|
264.9
|
|
||||
Accrued expenses and other current liabilities
|
|
7.0
|
|
|
216.3
|
|
|
(7.0
|
)
|
|
216.3
|
|
||||
Discounted financing receivables, current portion
|
|
—
|
|
|
79.9
|
|
|
—
|
|
|
79.9
|
|
||||
Total current liabilities
|
|
7.0
|
|
|
911.6
|
|
|
(7.0
|
)
|
|
911.6
|
|
||||
Long-term debt, net of debt issuance costs and current maturities
|
|
—
|
|
|
730.7
|
|
|
—
|
|
|
730.7
|
|
||||
Discounted financing receivables, less current portion
|
|
—
|
|
|
104.7
|
|
|
—
|
|
|
104.7
|
|
||||
Deferred income tax liabilities
|
|
—
|
|
|
273.1
|
|
|
(2.7
|
)
|
|
270.4
|
|
||||
Other liabilities
|
|
—
|
|
|
30.4
|
|
|
—
|
|
|
30.4
|
|
||||
Total liabilities
|
|
7.0
|
|
|
2,050.5
|
|
|
(9.7
|
)
|
|
2,047.8
|
|
||||
Total stockholders’ equity
|
|
602.9
|
|
|
605.2
|
|
|
(605.2
|
)
|
|
602.9
|
|
||||
Total liabilities and stockholders’ equity
|
|
$
|
609.9
|
|
|
$
|
2,655.7
|
|
|
$
|
(614.9
|
)
|
|
$
|
2,650.7
|
|
Condensed Consolidating Balance Sheet
|
||||||||||||||||
As of December 31, 2017
|
||||||||||||||||
|
||||||||||||||||
|
|
Presidio, Inc.
|
|
Presidio Holdings Inc. & Subsidiaries
|
|
Intercompany Adjustments
|
|
Consolidated
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Current Assets
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$
|
1.0
|
|
|
$
|
19.7
|
|
|
$
|
—
|
|
|
$
|
20.7
|
|
Accounts receivable, net
|
|
—
|
|
|
547.5
|
|
|
—
|
|
|
547.5
|
|
||||
Unbilled accounts receivable, net
|
|
—
|
|
|
194.5
|
|
|
—
|
|
|
194.5
|
|
||||
Financing receivables, current portion
|
|
—
|
|
|
82.2
|
|
|
—
|
|
|
82.2
|
|
||||
Inventory
|
|
—
|
|
|
29.9
|
|
|
—
|
|
|
29.9
|
|
||||
Prepaid expenses and other current assets
|
|
1.7
|
|
|
66.8
|
|
|
(5.0
|
)
|
|
63.5
|
|
||||
Total current assets
|
|
2.7
|
|
|
940.6
|
|
|
(5.0
|
)
|
|
938.3
|
|
||||
Property and equipment, net
|
|
—
|
|
|
34.1
|
|
|
—
|
|
|
34.1
|
|
||||
Deferred tax asset
|
|
1.6
|
|
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
||||
Financing receivables, less current portion
|
|
—
|
|
|
113.3
|
|
|
—
|
|
|
113.3
|
|
||||
Goodwill
|
|
—
|
|
|
784.1
|
|
|
—
|
|
|
784.1
|
|
||||
Identifiable intangible assets, net
|
|
—
|
|
|
719.0
|
|
|
—
|
|
|
719.0
|
|
||||
Other assets
|
|
730.4
|
|
|
33.0
|
|
|
(730.4
|
)
|
|
33.0
|
|
||||
Total assets
|
|
$
|
734.7
|
|
|
$
|
2,624.1
|
|
|
$
|
(737.0
|
)
|
|
$
|
2,621.8
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
||||||||
Current Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Accounts payable – trade
|
|
—
|
|
|
433.2
|
|
|
—
|
|
|
433.2
|
|
||||
Accounts payable – floor plan
|
|
—
|
|
|
199.6
|
|
|
—
|
|
|
199.6
|
|
||||
Accrued expenses and other current liabilities
|
|
5.9
|
|
|
189.9
|
|
|
(5.0
|
)
|
|
190.8
|
|
||||
Discounted financing receivables, current portion
|
|
—
|
|
|
77.7
|
|
|
—
|
|
|
77.7
|
|
||||
Total current liabilities
|
|
5.9
|
|
|
900.4
|
|
|
(5.0
|
)
|
|
901.3
|
|
||||
Long-term debt, net of debt issuance costs and current maturities
|
|
—
|
|
|
684.3
|
|
|
—
|
|
|
684.3
|
|
||||
Discounted financing receivables, less current portion
|
|
—
|
|
|
99.0
|
|
|
—
|
|
|
99.0
|
|
||||
Deferred income tax liabilities
|
|
—
|
|
|
183.2
|
|
|
(1.6
|
)
|
|
181.6
|
|
||||
Other liabilities
|
|
—
|
|
|
26.8
|
|
|
—
|
|
|
26.8
|
|
||||
Total liabilities
|
|
5.9
|
|
|
1,893.7
|
|
|
(6.6
|
)
|
|
1,893.0
|
|
||||
Total stockholders’ equity
|
|
728.8
|
|
|
730.4
|
|
|
(730.4
|
)
|
|
728.8
|
|
||||
Total liabilities and stockholders’ equity
|
|
$
|
734.7
|
|
|
$
|
2,624.1
|
|
|
$
|
(737.0
|
)
|
|
$
|
2,621.8
|
|
Condensed Consolidating Statement of Operations
|
||||||||||||||||
Three months ended December 31, 2016
|
||||||||||||||||
|
||||||||||||||||
|
|
Presidio, Inc.
|
|
Presidio Holdings Inc. & Subsidiaries
|
|
Intercompany Adjustments
|
|
Consolidated
|
||||||||
Total revenue
|
|
$
|
—
|
|
|
$
|
721.8
|
|
|
$
|
—
|
|
|
$
|
721.8
|
|
Total cost of revenue
|
|
—
|
|
|
578.9
|
|
|
—
|
|
|
578.9
|
|
||||
Gross margin
|
|
—
|
|
|
142.9
|
|
|
—
|
|
|
142.9
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative, and transaction costs
|
|
—
|
|
|
95.0
|
|
|
—
|
|
|
95.0
|
|
||||
Depreciation and amortization
|
|
—
|
|
|
20.4
|
|
|
—
|
|
|
20.4
|
|
||||
Total operating expenses
|
|
—
|
|
|
115.4
|
|
|
—
|
|
|
115.4
|
|
||||
Operating income
|
|
—
|
|
|
27.5
|
|
|
—
|
|
|
27.5
|
|
||||
Interest and other (income) expense
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
—
|
|
|
20.9
|
|
|
—
|
|
|
20.9
|
|
||||
Loss on extinguishment of debt
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
0.8
|
|
||||
Other (income) expense, net
|
|
(3.4
|
)
|
|
0.1
|
|
|
3.4
|
|
|
0.1
|
|
||||
Total interest and other (income) expense
|
|
(3.4
|
)
|
|
21.8
|
|
|
3.4
|
|
|
21.8
|
|
||||
Income before income taxes
|
|
3.4
|
|
|
5.7
|
|
|
(3.4
|
)
|
|
5.7
|
|
||||
Income tax expense
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
2.3
|
|
||||
Net income
|
|
$
|
3.4
|
|
|
$
|
3.4
|
|
|
$
|
(3.4
|
)
|
|
$
|
3.4
|
|
Condensed Consolidating Statement of Operations
|
||||||||||||||||
Three months ended December 31, 2017
|
||||||||||||||||
|
||||||||||||||||
|
|
Presidio, Inc.
|
|
Presidio Holdings Inc. & Subsidiaries
|
|
Intercompany Adjustments
|
|
Consolidated
|
||||||||
Total revenue
|
|
$
|
—
|
|
|
$
|
661.6
|
|
|
$
|
—
|
|
|
$
|
661.6
|
|
Total cost of revenue
|
|
—
|
|
|
524.2
|
|
|
—
|
|
|
524.2
|
|
||||
Gross margin
|
|
—
|
|
|
137.4
|
|
|
—
|
|
|
137.4
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative, and transaction costs
|
|
1.0
|
|
|
92.0
|
|
|
—
|
|
|
93.0
|
|
||||
Depreciation and amortization
|
|
—
|
|
|
21.1
|
|
|
—
|
|
|
21.1
|
|
||||
Total operating expenses
|
|
1.0
|
|
|
113.1
|
|
|
—
|
|
|
114.1
|
|
||||
Operating income (loss)
|
|
(1.0
|
)
|
|
24.3
|
|
|
—
|
|
|
23.3
|
|
||||
Interest and other (income) expense
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
—
|
|
|
12.7
|
|
|
—
|
|
|
12.7
|
|
||||
Loss on extinguishment of debt
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
||||
Other (income) expense, net
|
|
(100.8
|
)
|
|
(0.1
|
)
|
|
100.8
|
|
|
(0.1
|
)
|
||||
Total interest and other (income) expense
|
|
(100.8
|
)
|
|
13.3
|
|
|
100.8
|
|
|
13.3
|
|
||||
Income before income taxes
|
|
99.8
|
|
|
11.0
|
|
|
(100.8
|
)
|
|
10.0
|
|
||||
Income tax expense (benefit)
|
|
0.6
|
|
|
(89.8
|
)
|
|
—
|
|
|
(89.2
|
)
|
||||
Net income
|
|
$
|
99.2
|
|
|
$
|
100.8
|
|
|
$
|
(100.8
|
)
|
|
$
|
99.2
|
|
Condensed Consolidating Statement of Operations
|
||||||||||||||||
Six months ended December 31, 2016
|
||||||||||||||||
|
||||||||||||||||
|
|
Presidio, Inc.
|
|
Presidio Holdings Inc. & Subsidiaries
|
|
Intercompany Adjustments
|
|
Consolidated
|
||||||||
Total revenue
|
|
$
|
—
|
|
|
$
|
1,459.5
|
|
|
$
|
—
|
|
|
$
|
1,459.5
|
|
Total cost of revenue
|
|
—
|
|
|
1,168.0
|
|
|
—
|
|
|
1,168.0
|
|
||||
Gross margin
|
|
—
|
|
|
291.5
|
|
|
—
|
|
|
291.5
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative, and transaction costs
|
|
—
|
|
|
192.9
|
|
|
—
|
|
|
192.9
|
|
||||
Depreciation and amortization
|
|
—
|
|
|
40.8
|
|
|
—
|
|
|
40.8
|
|
||||
Total operating expenses
|
|
—
|
|
|
233.7
|
|
|
—
|
|
|
233.7
|
|
||||
Operating income
|
|
—
|
|
|
57.8
|
|
|
—
|
|
|
57.8
|
|
||||
Interest and other (income) expense
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
—
|
|
|
41.6
|
|
|
—
|
|
|
41.6
|
|
||||
Loss on extinguishment of debt
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
0.8
|
|
||||
Other (income) expense, net
|
|
(9.0
|
)
|
|
0.1
|
|
|
9.0
|
|
|
0.1
|
|
||||
Total interest and other (income) expense
|
|
(9.0
|
)
|
|
42.5
|
|
|
9.0
|
|
|
42.5
|
|
||||
Income before income taxes
|
|
9.0
|
|
|
15.3
|
|
|
(9.0
|
)
|
|
15.3
|
|
||||
Income tax expense
|
|
—
|
|
|
6.3
|
|
|
—
|
|
|
6.3
|
|
||||
Net income
|
|
$
|
9.0
|
|
|
$
|
9.0
|
|
|
$
|
(9.0
|
)
|
|
$
|
9.0
|
|
Condensed Consolidating Statement of Operations
|
||||||||||||||||
Six months ended December 31, 2017
|
||||||||||||||||
|
||||||||||||||||
|
|
Presidio, Inc.
|
|
Presidio Holdings Inc. & Subsidiaries
|
|
Intercompany Eliminations
|
|
Consolidated
|
||||||||
Total revenue
|
|
$
|
—
|
|
|
$
|
1,426.6
|
|
|
$
|
—
|
|
|
$
|
1,426.6
|
|
Total cost of revenue
|
|
—
|
|
|
1,132.9
|
|
|
—
|
|
|
1,132.9
|
|
||||
Gross margin
|
|
—
|
|
|
293.7
|
|
|
—
|
|
|
293.7
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative, and transaction costs
|
|
1.1
|
|
|
183.4
|
|
|
—
|
|
|
184.5
|
|
||||
Depreciation and amortization
|
|
—
|
|
|
41.7
|
|
|
—
|
|
|
41.7
|
|
||||
Total operating expenses
|
|
1.1
|
|
|
225.1
|
|
|
—
|
|
|
226.2
|
|
||||
Operating income (loss)
|
|
(1.1
|
)
|
|
68.6
|
|
|
—
|
|
|
67.5
|
|
||||
Interest and other (income) expense
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
—
|
|
|
25.2
|
|
|
—
|
|
|
25.2
|
|
||||
Loss on extinguishment of debt
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
1.4
|
|
||||
Other (income) expense, net
|
|
(120.6
|
)
|
|
(0.1
|
)
|
|
120.6
|
|
|
(0.1
|
)
|
||||
Total interest and other (income) expense
|
|
(120.6
|
)
|
|
26.5
|
|
|
120.6
|
|
|
26.5
|
|
||||
Income before income taxes
|
|
119.5
|
|
|
42.1
|
|
|
(120.6
|
)
|
|
41.0
|
|
||||
Income tax expense (benefit)
|
|
0.6
|
|
|
(78.5
|
)
|
|
—
|
|
|
(77.9
|
)
|
||||
Net income
|
|
$
|
118.9
|
|
|
$
|
120.6
|
|
|
$
|
(120.6
|
)
|
|
$
|
118.9
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||
Six months ended December 31, 2016
|
||||||||||||||||
|
||||||||||||||||
|
|
Presidio, Inc.
|
|
Presidio Holdings Inc. & Subsidiaries
|
|
Intercompany Adjustments
|
|
Consolidated
|
||||||||
Net cash provided by operating activities
|
|
$
|
0.2
|
|
|
$
|
83.1
|
|
|
$
|
—
|
|
|
$
|
83.3
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||||||
Proceeds from collection of escrow related to acquisition
of business
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
||||
Capital contribution to subsidiary
|
|
(25.0
|
)
|
|
—
|
|
|
25.0
|
|
|
—
|
|
||||
Additions of equipment under sales-type and direct
financing leases
|
|
—
|
|
|
(63.9
|
)
|
|
—
|
|
|
(63.9
|
)
|
||||
Proceeds from collection of financing receivables
|
|
—
|
|
|
7.7
|
|
|
—
|
|
|
7.7
|
|
||||
Additions to equipment under operating leases
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
||||
Proceeds from disposition of equipment under operating
leases
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
||||
Purchases of property and equipment
|
|
—
|
|
|
(6.7
|
)
|
|
—
|
|
|
(6.7
|
)
|
||||
Net cash used in investing activities
|
|
(25.0
|
)
|
|
(62.6
|
)
|
|
25.0
|
|
|
(62.6
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||||||
Proceeds from issuance of comment stock under share-
based compensation plans
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Proceeds from the discounting of financing receivables
|
|
—
|
|
|
66.1
|
|
|
—
|
|
|
66.1
|
|
||||
Retirements of discounted financing receivables
|
|
—
|
|
|
(4.3
|
)
|
|
—
|
|
|
(4.3
|
)
|
||||
Net repayments on the receivables securitization facility
|
|
—
|
|
|
(5.0
|
)
|
|
—
|
|
|
(5.0
|
)
|
||||
Capital contribution from parent
|
|
—
|
|
|
25.0
|
|
|
(25.0
|
)
|
|
—
|
|
||||
Repayments of term loans
|
|
—
|
|
|
(28.7
|
)
|
|
—
|
|
|
(28.7
|
)
|
||||
Net change in accounts payable — floor plan
|
|
—
|
|
|
(36.4
|
)
|
|
—
|
|
|
(36.4
|
)
|
||||
Net cash used in financing activities
|
|
0.1
|
|
|
16.7
|
|
|
(25.0
|
)
|
|
(8.2
|
)
|
||||
Net increase (decrease) in cash and cash
equivalents
|
|
(24.7
|
)
|
|
37.2
|
|
|
—
|
|
|
12.5
|
|
||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Beginning of the period
|
|
26.1
|
|
|
6.9
|
|
|
—
|
|
|
33.0
|
|
||||
End of the period
|
|
$
|
1.4
|
|
|
$
|
44.1
|
|
|
$
|
—
|
|
|
$
|
45.5
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||
Six months ended December 31, 2017
|
||||||||||||||||
|
||||||||||||||||
|
|
Presidio, Inc.
|
|
Presidio Holdings Inc. & Subsidiaries
|
|
Intercompany Adjustments
|
|
Consolidated
|
||||||||
Net cash provided by (used in) operating activities
|
|
$
|
(2.0
|
)
|
|
$
|
126.6
|
|
|
$
|
—
|
|
|
$
|
124.6
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||||||
Acquisition of businesses, net of cash and cash equivalents
acquired
|
|
—
|
|
|
(9.5
|
)
|
|
—
|
|
|
(9.5
|
)
|
||||
Proceeds from collection of escrow related to acquisition of business
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||
Additions of equipment under sales-type and direct financing
leases
|
|
—
|
|
|
(49.7
|
)
|
|
—
|
|
|
(49.7
|
)
|
||||
Proceeds from collection of financing receivables
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
2.2
|
|
||||
Additions to equipment under operating leases
|
|
—
|
|
|
(1.2
|
)
|
|
—
|
|
|
(1.2
|
)
|
||||
Proceeds from disposition of equipment under operating leases
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
||||
Purchases of property and equipment
|
|
—
|
|
|
(7.2
|
)
|
|
—
|
|
|
(7.2
|
)
|
||||
Net cash used in investing activities
|
|
—
|
|
|
(64.5
|
)
|
|
—
|
|
|
(64.5
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||||||
Proceeds from issuance of common stock under share-based
compensation plans
|
|
2.3
|
|
|
2.2
|
|
|
—
|
|
|
4.5
|
|
||||
Proceeds from the discounting of financing receivables
|
|
—
|
|
|
47.0
|
|
|
—
|
|
|
47.0
|
|
||||
Retirements of discounted financing receivables
|
|
—
|
|
|
(2.5
|
)
|
|
—
|
|
|
(2.5
|
)
|
||||
Deferred financing costs
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
||||
Repayments of term loans
|
|
—
|
|
|
(50.0
|
)
|
|
—
|
|
|
(50.0
|
)
|
||||
Net change in accounts payable — floor plan
|
|
—
|
|
|
(65.3
|
)
|
|
—
|
|
|
(65.3
|
)
|
||||
Net cash provided by (used in) financing activities
|
|
2.3
|
|
|
(69.2
|
)
|
|
—
|
|
|
(66.9
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
|
0.3
|
|
|
(7.1
|
)
|
|
—
|
|
|
(6.8
|
)
|
||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Beginning of the period
|
|
0.7
|
|
|
26.8
|
|
|
—
|
|
|
27.5
|
|
||||
End of the period
|
|
$
|
1.0
|
|
|
$
|
19.7
|
|
|
$
|
—
|
|
|
$
|
20.7
|
|
•
|
general economic conditions;
|
•
|
a reduced demand for our information technology solutions;
|
•
|
a decrease in spending on technology products by our federal and local government clients;
|
•
|
the availability of products from vendor partners and maintenance of vendor relationships;
|
•
|
the role of rapid innovation and the introduction of new products in our industry;
|
•
|
our ability to compete effectively in a competitive industry;
|
•
|
the termination of our client contracts;
|
•
|
the failure to effectively develop, maintain and operate our information technology systems;
|
•
|
our inability to adequately maintain the security of our information technology systems and clients’ confidential information;
|
•
|
investments in new services and technologies may not be successful;
|
•
|
the costs of litigation and losses if we infringe on the intellectual property rights of third parties;
|
•
|
inaccurate estimates of pricing terms with our clients;
|
•
|
failure to comply with the terms of our public sector contracts;
|
•
|
any failures by third-party contractors upon whom we rely to provide our services;
|
•
|
any failures by third-party commercial delivery services;
|
•
|
our inability to retain or hire skilled technology professionals and key personnel;
|
•
|
the disruption to our supply chain if suppliers fail to provide products;
|
•
|
the risks associated with accounts receivables and inventory exposure;
|
•
|
the failure to realize the entire investment in leased equipment;
|
•
|
our inability to realize the full amount of our backlog;
|
•
|
our acquisitions may not achieve expectations;
|
•
|
fluctuations in our operating results;
|
•
|
potential litigation and claims;
|
•
|
changes in accounting rules, tax legislation and other legislation;
|
•
|
increased costs of labor and benefits;
|
•
|
our inability to focus our resources, maintain our business structure and manage costs effectively;
|
•
|
the failure to deliver technical support services of sufficient quality;
|
•
|
the failure to meet our growth objectives and strategies;
|
•
|
ineffectiveness of our internal controls;
|
•
|
the risks pertaining to our substantial level of indebtedness; and
|
•
|
the other factors discussed in the section of this quarterly report entitled “Risk Factors.”
|
|
|
Three months ended December 31,
|
|
Six months ended December 31,
|
||||||||||||
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Total revenue
|
|
$
|
721.8
|
|
|
$
|
661.6
|
|
|
$
|
1,459.5
|
|
|
$
|
1,426.6
|
|
Gross margin
|
|
142.9
|
|
|
137.4
|
|
|
291.5
|
|
|
293.7
|
|
||||
Net income
|
|
3.4
|
|
|
99.2
|
|
|
9.0
|
|
|
118.9
|
|
||||
Adjusted EBITDA
|
|
54.7
|
|
|
49.4
|
|
|
112.9
|
|
|
116.9
|
|
||||
Adjusted EBITDA margin
|
|
7.6
|
%
|
|
7.5
|
%
|
|
7.7
|
%
|
|
8.2
|
%
|
||||
Adjusted Net Income
|
|
$
|
22.4
|
|
|
$
|
28.3
|
|
|
$
|
46.9
|
|
|
$
|
63.1
|
|
|
|
Three months ended December 31,
|
|
Six months ended December 31,
|
||||||||||||
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Adjusted EBITDA Reconciliation:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
3.4
|
|
|
$
|
99.2
|
|
|
$
|
9.0
|
|
|
$
|
118.9
|
|
Total depreciation and amortization
(1)
|
|
21.8
|
|
|
22.6
|
|
|
43.6
|
|
|
44.6
|
|
||||
Interest and other (income) expense
|
|
21.8
|
|
|
13.3
|
|
|
42.5
|
|
|
26.5
|
|
||||
Income tax expense (benefit)
|
|
2.3
|
|
|
(89.2
|
)
|
|
6.3
|
|
|
(77.9
|
)
|
||||
EBITDA
|
|
49.3
|
|
|
45.9
|
|
|
101.4
|
|
|
112.1
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Share-based compensation expense
|
|
0.5
|
|
|
1.8
|
|
|
1.0
|
|
|
2.6
|
|||||
Purchase accounting adjustments
(2)
|
|
0.2
|
|
|
—
|
|
|
0.6
|
|
|
0.1
|
|
||||
Transaction costs
(3)
|
|
2.6
|
|
|
1.7
|
|
|
6.0
|
|
|
2.1
|
|
||||
Other costs
(4)
|
|
2.1
|
|
|
—
|
|
|
3.9
|
|
|
—
|
|
||||
Total adjustments
|
|
5.4
|
|
|
3.5
|
|
|
11.5
|
|
|
4.8
|
|
||||
Adjusted EBITDA
|
|
$
|
54.7
|
|
|
$
|
49.4
|
|
|
$
|
112.9
|
|
|
$
|
116.9
|
|
(1)
|
“Total depreciation and amortization” equals the sum of (i) depreciation and amortization included within total operating expenses and (ii) depreciation and amortization recorded as part of cost of revenue within our consolidated financial statements.
|
(2)
|
“Purchase accounting adjustments” include charges associated with noncash adjustments to acquired assets and liabilities in connection with purchase accounting, such as recognition of increased cost of revenue in connection with an inventory step up fair value adjustment, recognition of reduced revenue in connection with a deferred revenue step down fair value adjustment and recognition of increased office rent expense associated with a fair value adjustment to the liability associated with deferred rent.
|
(3)
|
“Transaction costs” (i) of
$2.6 million
for the
three months ended December 31, 2016
includes acquisition-related expenses of
$0.7 million
related to stay and retention bonuses,
$1.7 million
related to transaction-related advisory and diligence fees and
$0.2 million
related to transaction-related legal, accounting and tax fees; (ii) of
$1.7 million
for the
three months ended December 31, 2017
includes acquisition-related expenses of
$0.7 million
related to stay and retention bonuses and
$1.0 million
related to transaction-related advisory and diligence fees in connection with the secondary offering of our common stock in November 2017; (iii) of
$6.0 million
for the
six months ended December 31, 2016
includes acquisition expenses of
$2.2 million
related to stay and retention bonuses,
$3.4 million
related to transaction-related advisory and diligence fees and
$0.4 million
related to transaction-related legal, accounting and tax fees; and (iv) of
$2.1 million
for the
six months ended December 31, 2017
includes acquisition-related expenses of
$1.0 million
related to stay and retention bonuses,
$1.0 million
related to transaction-related advisory and diligence fees in connection with the secondary offering of our common stock in November 2017 and
$0.1 million
related to transaction-related legal, accounting and tax fees.
|
(4)
|
“Other costs” (i) of
$2.1 million
for the
three months ended December 31, 2016
includes
$1.8 million
related to certain non-recurring costs incurred in the development of our new cloud service offerings and
$0.3 million
related to severance charges; and (ii) of
$3.9 million
for the
six months ended December 31, 2016
includes
$3.6 million
related to certain non-recurring costs incurred in the development of our new cloud service offerings and
$0.3 million
related to severance charges.
|
|
|
Three months ended December 31,
|
|
Six months ended December 31,
|
||||||||||||
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Adjusted Net Income reconciliation:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
3.4
|
|
|
$
|
99.2
|
|
|
$
|
9.0
|
|
|
$
|
118.9
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Amortization of intangible assets
|
|
18.4
|
|
|
18.8
|
|
|
36.8
|
|
|
37.2
|
|
||||
Amortization of debt issuance costs
|
|
1.7
|
|
|
1.3
|
|
|
3.4
|
|
|
2.6
|
|
||||
Loss on extinguishment of debt
|
|
0.8
|
|
|
0.7
|
|
|
0.8
|
|
|
1.4
|
|
||||
Share-based compensation expense
|
|
0.5
|
|
|
1.8
|
|
|
1.0
|
|
|
2.6
|
|
||||
Purchase accounting adjustments
|
|
0.2
|
|
|
—
|
|
|
0.6
|
|
|
0.1
|
|
||||
Transaction costs
|
|
2.6
|
|
|
1.7
|
|
|
6.0
|
|
|
2.1
|
|
||||
Other costs
|
|
2.1
|
|
|
—
|
|
|
3.9
|
|
|
—
|
|
||||
Revaluation of federal deferred taxes
|
|
—
|
|
|
(89.2
|
)
|
|
—
|
|
|
(89.2
|
)
|
||||
Income tax impact of adjustments
(1)
|
|
(7.3
|
)
|
|
(6.0
|
)
|
|
(14.6
|
)
|
|
(12.6
|
)
|
||||
Total adjustments
|
|
19.0
|
|
|
(70.9
|
)
|
|
37.9
|
|
|
(55.8
|
)
|
||||
Adjusted Net Income
|
|
$
|
22.4
|
|
|
$
|
28.3
|
|
|
$
|
46.9
|
|
|
$
|
63.1
|
|
(1)
|
“Income tax impact of adjustments” includes an estimated tax impact of the adjustments to net income at our average statutory rate to arrive at an appropriate effective tax rate on Adjusted Net Income, except for (i) the adjustment of certain transaction costs that are permanently nondeductible for tax purposes and (ii) the impact of tax-deductible goodwill and intangible assets resulting from certain historical acquisitions and further adjusted for discrete tax items such as the remeasurement of deferred tax liabilities due to state rate changes or the excess tax benefit related to share-based compensation activity.
|
|
|
Three months ended
December 31, 2016 |
|
Three months ended
December 31, 2017 |
|
Change
|
|||||||||
(in millions)
|
|
$
|
|
%
|
|||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|||||||
Product
|
|
$
|
612.2
|
|
|
$
|
540.3
|
|
|
$
|
(71.9
|
)
|
|
(11.7
|
)%
|
Service
|
|
109.6
|
|
|
121.3
|
|
|
11.7
|
|
|
10.7
|
%
|
|||
Total revenue
|
|
721.8
|
|
|
661.6
|
|
|
(60.2
|
)
|
|
(8.3
|
)%
|
|||
Cost of revenue
|
|
|
|
|
|
|
|
|
|||||||
Product
|
|
491.5
|
|
|
431.6
|
|
|
(59.9
|
)
|
|
(12.2
|
)%
|
|||
Service
|
|
87.4
|
|
|
92.6
|
|
|
5.2
|
|
|
5.9
|
%
|
|||
Total cost of revenue
|
|
578.9
|
|
|
524.2
|
|
|
(54.7
|
)
|
|
(9.4
|
)%
|
|||
Gross margin
|
|
142.9
|
|
|
137.4
|
|
|
(5.5
|
)
|
|
(3.8
|
)%
|
|||
Product gross margin
|
|
120.7
|
|
|
108.7
|
|
|
(12.0
|
)
|
|
(9.9
|
)%
|
|||
Service gross margin
|
|
22.2
|
|
|
28.7
|
|
|
6.5
|
|
|
29.3
|
%
|
|||
Product gross margin %
|
|
19.7
|
%
|
|
20.1
|
%
|
|
|
|
0.4
|
%
|
||||
Service gross margin %
|
|
20.3
|
%
|
|
23.7
|
%
|
|
|
|
3.4
|
%
|
||||
Total gross margin %
|
|
19.8
|
%
|
|
20.8
|
%
|
|
|
|
1.0
|
%
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
|||||||
Selling expenses
|
|
66.6
|
|
|
65.3
|
|
|
(1.3
|
)
|
|
(2.0
|
)%
|
|||
General and administrative expenses
|
|
25.8
|
|
|
26.0
|
|
|
0.2
|
|
|
0.8
|
%
|
|||
Transaction costs
|
|
2.6
|
|
|
1.7
|
|
|
(0.9
|
)
|
|
(34.6
|
)%
|
|||
Depreciation and amortization
|
|
20.4
|
|
|
21.1
|
|
|
0.7
|
|
|
3.4
|
%
|
|||
Total operating expenses
|
|
115.4
|
|
|
114.1
|
|
|
(1.3
|
)
|
|
(1.1
|
)%
|
|||
Selling, general and administrative
expenses % of total revenue
|
|
12.8
|
%
|
|
13.8
|
%
|
|
|
|
1.0
|
%
|
||||
Operating income
|
|
27.5
|
|
|
23.3
|
|
|
(4.2
|
)
|
|
(15.3
|
)%
|
|||
Interest and other (income) expense
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
20.9
|
|
|
12.7
|
|
|
(8.2
|
)
|
|
(39.2
|
)%
|
|||
Loss on extinguishment of debt
|
|
0.8
|
|
|
0.7
|
|
|
(0.1
|
)
|
|
(12.5
|
)%
|
|||
Other (income) expense, net
|
|
0.1
|
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(200.0
|
)%
|
|||
Total interest and other (income)
expense
|
|
21.8
|
|
|
13.3
|
|
|
(8.5
|
)
|
|
(39.0
|
)%
|
|||
Income before income taxes
|
|
5.7
|
|
|
10.0
|
|
|
4.3
|
|
|
75.4
|
%
|
|||
Income tax expense (benefit)
|
|
2.3
|
|
|
(89.2
|
)
|
|
(91.5
|
)
|
|
n.m.
|
|
|||
Net income
|
|
$
|
3.4
|
|
|
$
|
99.2
|
|
|
$
|
95.8
|
|
|
n.m.
|
|
Adjusted EBITDA
|
|
$
|
54.7
|
|
|
$
|
49.4
|
|
|
$
|
(5.3
|
)
|
|
(9.7
|
)%
|
Adjusted Net Income
|
|
$
|
22.4
|
|
|
$
|
28.3
|
|
|
$
|
5.9
|
|
|
26.3
|
%
|
|
|
Three months ended
December 31, 2016 |
|
Three months ended
December 31, 2017 |
|
Change
|
|||||||||
(in millions)
|
|
$
|
|
%
|
|||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|||||||
Product
|
|
$
|
612.2
|
|
|
$
|
540.3
|
|
|
$
|
(71.9
|
)
|
|
(11.7
|
)%
|
Service
|
|
109.6
|
|
|
121.3
|
|
|
11.7
|
|
|
10.7
|
%
|
|||
Total revenue
|
|
$
|
721.8
|
|
|
$
|
661.6
|
|
|
$
|
(60.2
|
)
|
|
(8.3
|
)%
|
|
|
Three months ended
December 31, 2016 |
|
Three months ended
December 31, 2017 |
|
Change
|
|||||||||
(in millions)
|
|
$
|
|
%
|
|||||||||||
Revenue by solution area
|
|
|
|
|
|
|
|
|
|||||||
Cloud
|
|
$
|
136.4
|
|
|
$
|
108.9
|
|
|
$
|
(27.5
|
)
|
|
(20.2
|
)%
|
Security
|
|
69.8
|
|
|
85.3
|
|
|
15.5
|
|
|
22.2
|
%
|
|||
Digital Infrastructure
|
|
515.6
|
|
|
467.4
|
|
|
(48.2
|
)
|
|
(9.3
|
)%
|
|||
Total revenue
|
|
$
|
721.8
|
|
|
$
|
661.6
|
|
|
$
|
(60.2
|
)
|
|
(8.3
|
)%
|
|
|
Three months ended
December 31, 2016 |
|
Three months ended
December 31, 2017 |
|
Change
|
|||||||||
(in millions)
|
|
$
|
|
%
|
|||||||||||
Gross margin
|
|
|
|
|
|
|
|
|
|||||||
Product gross margin
|
|
$
|
120.7
|
|
|
$
|
108.7
|
|
|
$
|
(12.0
|
)
|
|
(9.9
|
)%
|
Service gross margin
|
|
22.2
|
|
|
28.7
|
|
|
6.5
|
|
|
29.3
|
%
|
|||
Gross margin
|
|
$
|
142.9
|
|
|
$
|
137.4
|
|
|
$
|
(5.5
|
)
|
|
(3.8
|
)%
|
Product gross margin %
|
|
19.7
|
%
|
|
20.1
|
%
|
|
|
|
0.4
|
%
|
||||
Service gross margin %
|
|
20.3
|
%
|
|
23.7
|
%
|
|
|
|
3.4
|
%
|
||||
Total gross margin %
|
|
19.8
|
%
|
|
20.8
|
%
|
|
|
|
1.0
|
%
|
|
|
Three months ended
December 31, 2016 |
|
Three months ended
December 31, 2017 |
|
Change
|
|||||||||
(in millions)
|
|
$
|
|
%
|
|||||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|||||||
Selling expenses
|
|
$
|
66.6
|
|
|
$
|
65.3
|
|
|
$
|
(1.3
|
)
|
|
(2.0
|
)%
|
General and administrative expenses
|
|
25.8
|
|
|
26.0
|
|
|
0.2
|
|
|
0.8
|
%
|
|||
Selling, general and administrative
expenses
|
|
92.4
|
|
|
91.3
|
|
|
(1.1
|
)
|
|
(1.2
|
)%
|
|||
Transaction costs
|
|
2.6
|
|
|
1.7
|
|
|
(0.9
|
)
|
|
(34.6
|
)%
|
|||
Depreciation and amortization
|
|
20.4
|
|
|
21.1
|
|
|
0.7
|
|
|
3.4
|
%
|
|||
Total operating expenses
|
|
$
|
115.4
|
|
|
$
|
114.1
|
|
|
$
|
(1.3
|
)
|
|
(1.1
|
)%
|
Selling, general and administrative
expenses % of total revenue
|
|
12.8
|
%
|
|
13.8
|
%
|
|
|
|
1.0
|
%
|
|
|
Three months ended
December 31, 2016 |
|
Three months ended
December 31, 2017 |
|
Change
|
|||||||||
(in millions)
|
|
$
|
|
%
|
|||||||||||
Interest and other (income) expense
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
$
|
20.9
|
|
|
$
|
12.7
|
|
|
$
|
(8.2
|
)
|
|
(39.2
|
)%
|
Loss on extinguishment of debt
|
|
0.8
|
|
|
0.7
|
|
|
(0.1
|
)
|
|
(12.5
|
)%
|
|||
Other (income) expense, net
|
|
0.1
|
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(200.0
|
)%
|
|||
Total interest and other (income)
expense
|
|
$
|
21.8
|
|
|
$
|
13.3
|
|
|
$
|
(8.5
|
)
|
|
(39.0
|
)%
|
|
|
Three months ended
December 31, 2016 |
|
Three months ended
December 31, 2017 |
|
Change
|
|||||||||
(in millions)
|
|
$
|
|
%
|
|||||||||||
Income before income taxes
|
|
$
|
5.7
|
|
|
$
|
10.0
|
|
|
$
|
4.3
|
|
|
75.4
|
%
|
Income tax expense (benefit)
|
|
2.3
|
|
|
(89.2
|
)
|
|
(91.5
|
)
|
|
n.m.
|
|
|||
Net income
|
|
$
|
3.4
|
|
|
$
|
99.2
|
|
|
$
|
95.8
|
|
|
n.m.
|
|
|
|
Six months ended December 31, 2016
|
|
Six months ended December 31, 2017
|
|
Change
|
|||||||||
(in millions)
|
|
$
|
|
%
|
|||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|||||||
Product
|
|
$
|
1,238.6
|
|
|
$
|
1,168.9
|
|
|
$
|
(69.7
|
)
|
|
(5.6
|
)%
|
Service
|
|
220.9
|
|
|
257.7
|
|
|
36.8
|
|
|
16.7
|
%
|
|||
Total revenue
|
|
1,459.5
|
|
|
1,426.6
|
|
|
(32.9
|
)
|
|
(2.3
|
)%
|
|||
Cost of revenue
|
|
|
|
|
|
|
|
|
|||||||
Product
|
|
991.0
|
|
|
929.7
|
|
|
(61.3
|
)
|
|
(6.2
|
)%
|
|||
Service
|
|
177.0
|
|
|
203.2
|
|
|
26.2
|
|
|
14.8
|
%
|
|||
Total cost of revenue
|
|
1,168.0
|
|
|
1,132.9
|
|
|
(35.1
|
)
|
|
(3.0
|
)%
|
|||
Gross margin
|
|
291.5
|
|
|
293.7
|
|
|
2.2
|
|
|
0.8
|
%
|
|||
Product gross margin
|
|
247.6
|
|
|
239.2
|
|
|
(8.4
|
)
|
|
(3.4
|
)%
|
|||
Service gross margin
|
|
43.9
|
|
|
54.5
|
|
|
10.6
|
|
|
24.1
|
%
|
|||
Product gross margin %
|
|
20.0
|
%
|
|
20.5
|
%
|
|
|
|
0.5
|
%
|
||||
Service gross margin %
|
|
19.9
|
%
|
|
21.1
|
%
|
|
|
|
1.2
|
%
|
||||
Total gross margin %
|
|
20.0
|
%
|
|
20.6
|
%
|
|
|
|
0.6
|
%
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
|||||||
Selling expenses
|
|
134.1
|
|
|
130.7
|
|
|
(3.4
|
)
|
|
(2.5
|
)%
|
|||
General and administrative expenses
|
|
52.8
|
|
|
51.7
|
|
|
(1.1
|
)
|
|
(2.1
|
)%
|
|||
Transaction costs
|
|
6.0
|
|
|
2.1
|
|
|
(3.9
|
)
|
|
(65.0
|
)%
|
|||
Depreciation and amortization
|
|
40.8
|
|
|
41.7
|
|
|
0.9
|
|
|
2.2
|
%
|
|||
Total operating expenses
|
|
233.7
|
|
|
226.2
|
|
|
(7.5
|
)
|
|
(3.2
|
)%
|
|||
Selling, general and administrative
expenses % of total revenue
|
|
12.8
|
%
|
|
12.8
|
%
|
|
|
|
—
|
%
|
||||
Operating income
|
|
57.8
|
|
|
67.5
|
|
|
9.7
|
|
|
16.8
|
%
|
|||
Interest and other (income) expense
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
41.6
|
|
|
25.2
|
|
|
(16.4
|
)
|
|
(39.4
|
)%
|
|||
Loss on extinguishment of debt
|
|
0.8
|
|
|
1.4
|
|
|
0.6
|
|
|
75.0
|
%
|
|||
Other (income) expense, net
|
|
0.1
|
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(200.0
|
)%
|
|||
Total interest and other (income)
expense
|
|
42.5
|
|
|
26.5
|
|
|
(16.0
|
)
|
|
(37.6
|
)%
|
|||
Income before income taxes
|
|
15.3
|
|
|
41.0
|
|
|
25.7
|
|
|
168.0
|
%
|
|||
Income tax expense (benefit)
|
|
6.3
|
|
|
(77.9
|
)
|
|
(84.2
|
)
|
|
n.m.
|
|
|||
Net income
|
|
$
|
9.0
|
|
|
$
|
118.9
|
|
|
$
|
109.9
|
|
|
n.m.
|
|
Adjusted EBITDA
|
|
$
|
112.9
|
|
|
$
|
116.9
|
|
|
$
|
4.0
|
|
|
3.5
|
%
|
Adjusted Net Income
|
|
$
|
46.9
|
|
|
$
|
63.1
|
|
|
$
|
16.2
|
|
|
34.5
|
%
|
|
|
Six months ended December 31, 2016
|
|
Six months ended December 31, 2017
|
|
Change
|
|||||||||
(in millions)
|
|
$
|
|
%
|
|||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|||||||
Product
|
|
$
|
1,238.6
|
|
|
$
|
1,168.9
|
|
|
$
|
(69.7
|
)
|
|
(5.6
|
)%
|
Service
|
|
220.9
|
|
|
257.7
|
|
|
36.8
|
|
|
16.7
|
%
|
|||
Total revenue
|
|
$
|
1,459.5
|
|
|
$
|
1,426.6
|
|
|
$
|
(32.9
|
)
|
|
(2.3
|
)%
|
|
|
Six months ended December 31, 2016
|
|
Six months ended December 31, 2017
|
|
Change
|
|||||||||
(in millions)
|
|
$
|
|
%
|
|||||||||||
Revenue by solution area
|
|
|
|
|
|
|
|
|
|||||||
Cloud
|
|
$
|
248.1
|
|
|
$
|
244.4
|
|
|
$
|
(3.7
|
)
|
|
(1.5
|
)%
|
Security
|
|
136.5
|
|
|
194.3
|
|
|
57.8
|
|
|
42.3
|
%
|
|||
Digital Infrastructure
|
|
1,074.9
|
|
|
987.9
|
|
|
(87.0
|
)
|
|
(8.1
|
)%
|
|||
Total revenue
|
|
$
|
1,459.5
|
|
|
$
|
1,426.6
|
|
|
$
|
(32.9
|
)
|
|
(2.3
|
)%
|
|
|
Six months ended December 31, 2016
|
|
Six months ended December 31, 2017
|
|
Change
|
|||||||||
(in millions)
|
|
$
|
|
%
|
|||||||||||
Gross margin
|
|
|
|
|
|
|
|
|
|||||||
Product gross margin
|
|
$
|
247.6
|
|
|
$
|
239.2
|
|
|
$
|
(8.4
|
)
|
|
(3.4
|
)%
|
Service gross margin
|
|
43.9
|
|
|
54.5
|
|
|
10.6
|
|
|
24.1
|
%
|
|||
Gross margin
|
|
$
|
291.5
|
|
|
$
|
293.7
|
|
|
$
|
2.2
|
|
|
0.8
|
%
|
Product gross margin %
|
|
20.0
|
%
|
|
20.5
|
%
|
|
|
|
0.5
|
%
|
||||
Service gross margin %
|
|
19.9
|
%
|
|
21.1
|
%
|
|
|
|
1.2
|
%
|
||||
Total gross margin %
|
|
20.0
|
%
|
|
20.6
|
%
|
|
|
|
0.6
|
%
|
|
|
Six months ended December 31, 2016
|
|
Six months ended December 31, 2017
|
|
Change
|
|||||||||
(in millions)
|
|
$
|
|
%
|
|||||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|||||||
Selling expenses
|
|
$
|
134.1
|
|
|
$
|
130.7
|
|
|
$
|
(3.4
|
)
|
|
(2.5
|
)%
|
General and administrative expenses
|
|
52.8
|
|
|
51.7
|
|
|
(1.1
|
)
|
|
(2.1
|
)%
|
|||
Selling, general and administrative
expenses
|
|
186.9
|
|
|
182.4
|
|
|
(4.5
|
)
|
|
(2.4
|
)%
|
|||
Transaction costs
|
|
6.0
|
|
|
2.1
|
|
|
(3.9
|
)
|
|
(65.0
|
)%
|
|||
Depreciation and amortization
|
|
40.8
|
|
|
41.7
|
|
|
0.9
|
|
|
2.2
|
%
|
|||
Total operating expenses
|
|
$
|
233.7
|
|
|
$
|
226.2
|
|
|
$
|
(7.5
|
)
|
|
(3.2
|
)%
|
Selling, general and administrative
expenses % of total revenue
|
|
12.8
|
%
|
|
12.8
|
%
|
|
|
|
—
|
%
|
|
|
Six months ended December 31, 2016
|
|
Six months ended December 31, 2017
|
|
Change
|
|||||||||
(in millions)
|
|
$
|
|
%
|
|||||||||||
Interest and other (income) expense
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
$
|
41.6
|
|
|
$
|
25.2
|
|
|
$
|
(16.4
|
)
|
|
(39.4
|
)%
|
Loss on extinguishment of debt
|
|
0.8
|
|
|
1.4
|
|
|
0.6
|
|
|
75.0
|
%
|
|||
Other (income) expense, net
|
|
0.1
|
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(200.0
|
)%
|
|||
Total interest and other (income)
expense
|
|
$
|
42.5
|
|
|
$
|
26.5
|
|
|
$
|
(16.0
|
)
|
|
(37.6
|
)%
|
|
|
Six months ended December 31, 2016
|
|
Six months ended December 31, 2017
|
|
Change
|
|||||||||
(in millions)
|
|
$
|
|
%
|
|||||||||||
Income before income taxes
|
|
$
|
15.3
|
|
|
$
|
41.0
|
|
|
$
|
25.7
|
|
|
168.0
|
%
|
Income tax expense (benefit)
|
|
6.3
|
|
|
(77.9
|
)
|
|
(84.2
|
)
|
|
n.m.
|
|
|||
Net income
|
|
$
|
9.0
|
|
|
$
|
118.9
|
|
|
$
|
109.9
|
|
|
n.m.
|
|
|
|
Six months ended
December 31, 2016 |
|
Six months ended
December 31, 2017 |
||||
Net cash provided by (used in)
|
|
|
|
|
||||
Operating activities
|
|
$
|
83.3
|
|
|
$
|
124.6
|
|
Investing activities
|
|
(62.6
|
)
|
|
(64.5
|
)
|
||
Net change in accounts payable — floor plan
|
|
(36.4
|
)
|
|
(65.3
|
)
|
||
Other financing activities
|
|
28.2
|
|
|
(1.6
|
)
|
||
Financing activities
|
|
(8.2
|
)
|
|
(66.9
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
12.5
|
|
|
$
|
(6.8
|
)
|
|
|
Six months ended
December 31, 2016 |
|
Six months ended
December 31, 2017 |
||||
Impact of tax deductible goodwill and intangible assets
|
|
$
|
6.0
|
|
|
$
|
5.1
|
|
(in millions, except ratio data)
|
|
June 30, 2017
|
|
December 31, 2017
|
||||
Net debt
|
|
$
|
724.1
|
|
|
$
|
680.9
|
|
Net working capital ratio
|
|
1.00
|
x
|
|
1.02
|
x
|
||
Available liquidity
|
|
$
|
251.5
|
|
|
$
|
309.8
|
|
(in millions)
|
|
Six months ended
December 31, 2016 |
|
Six months ended
December 31, 2017 |
||||
Free cash flow
|
|
$
|
45.5
|
|
|
$
|
48.6
|
|
|
|
June 30, 2017
|
|
December 31, 2017
|
||||
Total long-term debt, net of debt issuance costs
|
|
$
|
730.7
|
|
|
$
|
684.3
|
|
Unamortized debt issuance costs
|
|
20.9
|
|
|
17.3
|
|
||
Cash and cash equivalents
|
|
(27.5
|
)
|
|
(20.7
|
)
|
||
Net debt
|
|
$
|
724.1
|
|
|
$
|
680.9
|
|
|
|
June 30, 2017
|
|
December 31, 2017
|
||||
Cash and cash equivalents
|
|
$
|
27.5
|
|
|
$
|
20.7
|
|
Availability under the revolving credit facility
|
|
48.5
|
|
|
48.5
|
|
||
Availability under the receivables securitization facility
|
|
175.5
|
|
|
240.6
|
|
||
Available liquidity
|
|
$
|
251.5
|
|
|
$
|
309.8
|
|
|
|
June 30, 2017
|
|
December 31, 2017
|
||||
Cash and cash equivalents
|
|
$
|
27.5
|
|
|
$
|
20.7
|
|
Accounts payable—floor plan facility
|
|
$
|
264.9
|
|
|
$
|
199.6
|
|
Long-term debt:
|
|
|
|
|
||||
Revolving credit facility
|
|
$
|
—
|
|
|
$
|
—
|
|
Receivables securitization facility
|
|
—
|
|
|
—
|
|
||
Term loan facility, due February 2022
|
|
626.6
|
|
|
576.6
|
|
||
Senior Notes, 10.25% due February 2023
|
|
125.0
|
|
|
125.0
|
|
||
Total long-term debt
|
|
$
|
751.6
|
|
|
$
|
701.6
|
|
|
|
Six months ended
December 31, 2016 |
|
Six months ended
December 31, 2017 |
||||
Net cash provided by operating activities
|
|
$
|
83.3
|
|
|
$
|
124.6
|
|
Adjustments to reconcile to free cash flow:
|
|
|
|
|
||||
Net change in accounts payable — floor plan
|
|
(36.4
|
)
|
|
(65.3
|
)
|
||
Additions of equipment under sales-type and direct financing leases
|
|
(63.9
|
)
|
|
(49.7
|
)
|
||
Proceeds from collection of financing receivables
|
|
7.7
|
|
|
2.2
|
|
||
Additions to equipment under operating leases
|
|
(0.8
|
)
|
|
(1.2
|
)
|
||
Proceeds from disposition of equipment under operating leases
|
|
0.5
|
|
|
0.7
|
|
||
Proceeds from the discounting of financing receivables
|
|
66.1
|
|
|
47.0
|
|
||
Retirements of discounted financing receivables
|
|
(4.3
|
)
|
|
(2.5
|
)
|
||
Purchases of property and equipment
|
|
(6.7
|
)
|
|
(7.2
|
)
|
||
Total adjustments
|
|
(37.8
|
)
|
|
(76.0
|
)
|
||
Free cash flow
|
|
$
|
45.5
|
|
|
$
|
48.6
|
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
3.1
|
|
|
S-8
|
|
3.1
|
|
3/13/2017
|
|
3.2
|
|
|
S-8
|
|
3.2
|
|
3/13/2017
|
|
*10.1
|
|
|
|
|
|
|
|
|
*10.2
|
|
|
|
|
|
|
|
|
*31.1
|
|
|
|
|
|
|
|
|
*31.2
|
|
|
|
|
|
|
|
|
**32.1
|
|
|
|
|
|
|
|
|
**32.2
|
|
|
|
|
|
|
|
|
*101.INS
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
*101.SCH
|
|
XBRL Taxonomy Extension Schema Linkbase Document.
|
|
|
|
|
|
|
*101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document.
|
|
|
|
|
|
|
*101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
|
|
*101.LAB
|
|
XBRL Taxonomy Label Linkbase Document.
|
|
|
|
|
|
|
*101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document.
|
|
|
|
|
|
|
|
|
PRESIDIO, INC.
|
|
|
|
Dated: February 8, 2018
|
By:
|
/S/ NEIL O. JOHNSTON
|
|
|
Neil O. Johnston
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
Refinancing and Incremental Term Lender
|
Refinancing and Incremental Term
Loan Commitment
|
Citibank, N.A.
|
$716,624,504.76
|
Total
|
$716,624,504.76
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Presidio, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Presidio, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|