CommScope Holding Company, Inc., a global leader in network connectivity solutions, reported results for the quarter ended September 30, 2021.
Net sales in the third quarter of 2021 decreased 2.9% year over year to $2.11 billion. Core net sales increased 6.0% year over year primarily due to higher net sales in the Outdoor Wireless Networks and Venue and Campus Networks segments.
Net loss of $124.2 million, or $0.68 per share, in the third quarter of 2021, increased 6.8% compared to the prior year period's net loss of $116.3 million, or $0.66 per share. Non-GAAP adjusted net income for the third quarter of 2021 was $72.2 million, or $0.29 per share, versus $123.1 million, or $0.51 per share, in the third quarter of 2020.
Non-GAAP adjusted EBITDA decreased 24.2% to $259.1 million in the third quarter of 2021 compared to the same period last year. Non-GAAP adjusted EBITDA decreased to 12.3% of net sales in the third quarter of 2021 compared to 15.8% of net sales in the same prior year period. Core segment adjusted EBITDA decreased 11.8% in the third quarter of 2021 and decreased to 16.2% of net sales compared to 19.5% of net sales in the prior year period.
The negative impact of COVID-19 on the company’s financial performance eased somewhat during 2021,with network strain driving increased demand for certain broadband segment products although net sales of these products have been tempered by capacity constraints. The recovery in demand has also had unfavorable business impacts, including commodity inflation (primarily copper and resins), logistics cost increases, extended lead times and certain component part shortages. All of the company’s segments experienced supply shortages and extended lead times for certain materials that negatively affected the company’s ability to meet customer demand for its products. Certain unfavorable impacts are expected to continue for the remainder of 2021 and into 2022.
Cash flow and balance sheet
GAAP cash flow from operations was $67.1 million.
Non-GAAP adjusted free cash flow was $64.3 million after adjusting operating cash flow for $36.0 million of additions to property, plant and equipment, $6.9 million of cash paid for restructuring costs and $26.3 million of cash paid for transaction, transformation and integration costs. Ended the quarter with $411.5 million in cash and cash equivalents.
As of September 30, 2021, the Company had no outstanding borrowings under its asset-based revolving credit facility and had availability of $686.4 million, after giving effect to borrowing base limitations and outstanding letters of credit. The Company ended the quarter with total liquidity of approximately $1.098 billion.
Commenting on the results, Chuck Treadway, president and chief executive officer, said, “Our third quarter performance and financial results reflect the ongoing challenges associated with the global supply chain disruption, increased costs of materials and freight, and semiconductor chip shortage occurring across our industry and broader economy. While we continue to experience strong demand for CommScope’s products and services, we expect these significant headwinds to persist in the near-term. We are actively and swiftly addressing external pressures and are engaging with our customer base regarding pricing adjustments, as well as operational measures to make up for inflation effects. Our teams remain laser focused on executing on our CommScope NEXT strategy and achieving our goals of incremental growth, cost optimization and shareholder value creation.”
