Fourth Quarter Highlights

• Net sales of $1.186 billion
• GAAP loss from continuing operations of $339.0 million, including asset impairments of $145.4 million
• Non-GAAP adjusted EBITDA of $190.7 million
• Core segment adjusted EBITDA of $198.9 million*
• Cash flow generated by operations of $60.4 million and non-GAAP adjusted free cash flow of $91.5 million

Full Year Highlights

• Net sales of $5.789 billion
• GAAP loss from continuing operations of $851.3 million, including asset impairments of $571.4 million
• Non-GAAP adjusted EBITDA of $999.0 million
• Core segment adjusted EBITDA of $1.022 billion*
• Cash flow generated by operations of $289.9 million and non-GAAP adjusted free cash flow of $382.3 million

* References to certain supplementary “Core” financial measures reflect the results of the Connectivity and Cable Solutions (CCS), Networking, Intelligent Cellular and Security Solutions (NICS), Outdoor Wireless Networks (OWN) and Access Network Solutions (ANS) segments, in the aggregate. Core financial measures exclude general corporate costs that were previously allocated to the Home Networks (Home) segment and are now classified as continuing operations, since the costs were not directly attributable to the discontinued operations of the Home segment. See the segment comparison tables below showing the aggregation of the Core financial measures.

CLAREMONT, N.C.: CommScope Holding Company, Inc. (NASDAQ: COMM), a global leader in network connectivity solutions, today reported results for the quarter and year ended December 31, 2023.

“As we closed a challenging year, CommScope net sales declined 23% from the prior year to $5.79 billion and delivered adjusted EBITDA at the midpoint of our range at $1.02 billion down 18% from the prior year. As previously discussed, all of our businesses had significant pressure by year end. In addition to the challenges we have been experiencing in CCS, OWN and ANS, we have started to see similar adjustments in the NICS business as customers continued to digest inventory. Although we believe there will be a market recovery in the second half of 2024, visibility continues to be limited on the timing and extent of that recovery. As stated, we are targeting an additional $100 million of cost savings in early 2024. Our cost actions as well as our investments in capacity that we have implemented will better position us when demand returns to more normalized levels,” said Chuck Treadway, President and Chief Executive Officer.

“For the fourth quarter, CommScope reported consolidated net sales of $1.186 billion, a decrease of 38% from the prior year, driven by declines in all of the segments. As a result of lower revenues, adjusted EBITDA of $191 million, declined 49% versus prior year. Adjusted EPS was a loss of $0.02 per share. As we turn our focus to 2024, based on the lack of visibility on timing of a market recovery, we are not providing updated 2024 annual guideposts at this time. As we continue to deal with lower market demand, we would expect that the first quarter Core adjusted EBITDA to be in the range of $100 to $125 million,” said Kyle Lorentzen, Chief Financial Officer.

As previously announced, in the fourth quarter of 2023, CommScope entered into an agreement with Vantiva SA to divest of its Home business. As a result, unless otherwise noted, these financial results relate to CommScope’s continuing operations, which include the Company’s remaining four operating segments: CCS, OWN, NICS and ANS. For all periods presented, amounts have been recast to reflect these changes. The divestiture of Home closed on January 9, 2024.

Impacts of Current Economic Conditions

In 2023, macroeconomic factors such as higher interest rates and concerns about continued inflation and a global economic slow-down softened demand for CommScope’s products, with certain customers reducing purchases as they right-sized their inventories and others pausing capital spending. This negatively impacted net sales in the Company's CCS, OWN and ANS segments in 2023 and may continue to have a material negative impact on net sales into at least the first half of 2024. Conversely, in the Company's NICS segment, CommScope saw higher demand and favorable pricing impacts that partially offset the impact of lower demand in its other segments for the full year 2023. However, NICS segment net sales were down in the fourth quarter of 2023 as the Company saw order rates decline as channel partners paused to digest inventory.

CommScope saw lower input costs across most of its segments as inflation settled during the year. The Company proactively implemented cost savings initiatives that favorably impacted its profitability in 2023 and should enable CommScope to take advantage of the expected recovery in demand in the second half of 2024.

Fourth Quarter Results and Comparisons

Net sales in the fourth quarter of 2023 decreased 38.4% year-over-year to $1.186 billion due to lower net sales in the CCS, NICS, OWN and ANS segments. Net sales decreased across all regions in the fourth quarter of 2023.

Loss from continuing operations of $339.0 million, or $(1.67) per share, in the fourth quarter of 2023, decreased compared to the prior year period's loss from continuing operations of $1.061 billion, or $(5.16) per share. In the fourth quarter of 2023, the Company recorded goodwill impairment charges in the ANS and CCS segments of $46.3 million and $99.1 million, respectively, related to the ANS and BDCC reporting units, respectively. In the fourth quarter of 2022, the Company recorded a goodwill impairment charge in the ANS segment of $1.120 billion related to the ANS reporting unit. Asset impairment charges are not reflected in non-GAAP adjusted results. Non-GAAP adjusted net income (loss) for the fourth quarter of 2023 was $(3.9) million, or $(0.02) per share, versus $138.1 million, or $0.55 per share, in the fourth quarter of 2022.

Non-GAAP adjusted EBITDA decreased 49.2% to $190.7 million in the fourth quarter of 2023 compared to the same period last year. Non-GAAP adjusted EBITDA as a percentage of net sales decreased to 16.1% in the fourth quarter of 2023 compared to 19.5% in the same prior year period.

Core segment adjusted EBITDA decreased 47.8% to $198.9 million in the fourth quarter of 2023 compared to the same prior year period. Core segment adjusted EBITDA as a percentage of net sales decreased to 16.8% in the fourth quarter of 2023 compared to 19.8% in the same prior year period. Core segment adjusted EBITDA reflects the results of the Company’s CCS, OWN, NICS and ANS segments, in the aggregate, and excludes general corporate costs that were previously allocated to the Home segment and are now classified as continuing operations, since the costs were not directly attributable to the discontinued operations of the Home segment.

Reconciliations of the reported GAAP results to non-GAAP adjusted results are included below.

Fourth Quarter Comparisons

Segment Adjusted EBITDA (See “Non-GAAP Financial Measures,” below)
										% Change
		Q4 2023				Q4 2022				YOY
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