Black Box Corporation (NASDAQ:BBOX) Q1 2016 Earnings Conference Call - Final Transcript
Jul 28, 2015 • 05:00 pm ET
in obtaining two significant awards. First, we were selected as one of 20 industry partners awarded prime contractor status to provide information technology products and solutions to the United States Air Force through its ten-year $8 billion NETCENTS-2 contract.
In addition, we also announced that we were awarded a five-year $33 million telecommunications contract by the Department of Energy's Integrated Support Center at Oak Ridge, Tennessee. These awards support our outlook for our federal business in the second half of our fiscal year.
Although we're facing challenges in our businesses, we remain confident that our path of transformation is correct and our strategy is sound and essential to future growth. Our transformation is directly aligned with our strategy to have a consistent, unified go-to-market approach, optimize our support structure, leverage our expertise, and strengthen our offerings.
It will provide us with the ability to strengthen our platform to provide effective, efficient business solutions to the market. I'm also very confident that our new sales organization will become more effective over time. But I also committed to appropriate levels of spending in our business in order to provide operating margin expansion.
I know Tim discussed this but it is a point that I want to emphasize as well. As a result of the slower than anticipated start of our sales initiative and revised guidance, we're taking immediate action to reduce our operating expenses to approximately 25% of revenue for the year, or approximately $61 million per quarter for the remainder of fiscal 2016.
We believe that we'll be able to achieve that without reducing the investments we need to make in support of our transformation, which is critical to our long-term success. Now I'd like to open up the line for questions.