##### 



UNITED STATES  SECURITIES AND EXCHANGE COMMISSION  Washington, D.C. 20549
   (Mark One) þ
 For the fiscal year ended March 31, 2006
  o
 For the transition period from  to
 Commission file number: 0-18706
  Black Box Corporation
  Delaware
    
    95-3086563(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)1000 Park Drive, Lawrence Pennsylvania
    
    15055(Address of principal executive offices)
    
    (Zip Code)
 724-746-5500
 None
 Common Stock, $.001 par value
 þ o
 o þ
 þ o
 þ
  þ o o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




---



##### 



BLACK BOX CORPORATION
 INDEX
 PART I
    
    PageItem 1.
    
    Business
    
    
    3Item 1A.
    
    Risk Factors
    
    
    7Item 1B.
    
    Unresolved Staff Comments
    
    
    8Item 2.
    
    Properties
    
    
    8Item 3.
    
    Legal Proceedings
    
    
    8Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    9PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    10Item 6.
    
    Selected Financial Data
    
    
    12Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    13Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    30Item 8.
    
    Financial Statements and Supplementary Data
    
    
    31Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    61Item 9A.
    
    Controls and Procedures
    
    
    62Item 9B.
    
    Other Information
    
    
    65PART IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    
    65Item 11.
    
    Executive Compensation
    
    
    65Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    65Item 13.
    
    Certain Relationships and Related Transactions
    
    
    65Item 14.
    
    Principal Accounting Fees and Services
    
    
    65PART IVItem 15.
    

Exhibits
and Financial Statement Schedules
    
    
    66Signatures
    
    
    69
  2




---



##### 



PART I
 
 Item1. Business.
 Overview.
 ®
   Industry Background.
 Business Strategy.
 Expert Technical Support Deployed Three Ways.  Locally at Client Sites: ® ® ®
 24/7/365 Technical Support:
 www.blackbox.com Internet Web Site:
 3




---



##### 



Worldwide Coverage.
 Quality Networking Solutions and Comprehensive Warranties. ®
 Brand Name.
 ISO 9001:2000 Certified.
 Proprietary Client List.
 Rapid Order Fulfillment.
 Growth Strategy. tm
 Mergers
and Acquisitions.
 Fiscal 2006
 4




---



##### 



Fiscal 2005
 Subsequent Events
   Clients.
 Marketing.
 Technical Services.
 5




---



##### 



Worldwide Headquarters.
 Products.
 Manufacturers
and Suppliers.
  Information Systems.
  Backlog. i.e
 Team Members.
 Financial Information.
 International Revenues.
 Competition.
 6




---



##### 



Other Information.
 
 Item1A. Risk Factors.
  Competition
 Economic environments
 Successful integration of acquired businesses
 International operations
 Retention of key personnel
 Demand for products and services
 Supply
chain
 7




---



##### 



Future mergers and acquisitions
 Public sector business
 Revenue growth
 Liquidity
 Stock price
 
 Item1B. Unresolved Staff Comments.
  
 Item2. Properties.
    
 Item 3.Legal Proceedings.
   8




---



##### 



Item 4. Submission of Matters to a Vote of Security Holders.
   Executive Officers of the Registrant
  Name
    
    Age
    
    Position with the CompanyFred C. Young
    
    
    50
    
    
    Chief Executive OfficerMichael McAndrew
    
    
    46
    
    
    Vice President, Chief Financial Officer,
Treasurer, Secretary and Principal Accounting
OfficerRoger E. M. Croft
    
    
    57
    
    
    Senior Vice President  Europe and Latin
AmericaFrancis W.
Wertheimber
    
    
    53
    
    
    Senior Vice President  Pacific Rim/Far East
  FRED C. YOUNG
 MICHAEL MCANDREW
 ROGER E. M. CROFT
 FRANCIS W. WERTHEIMBER
 9




---



##### 



PART II
 
 Item 5. Market forRegistrants Common Equity,
RelatedStockholder Matters andIssuer Purchases ofEquity Securities.
   High
    
    LowFiscal 20051st Quarter
    
    $
    58.18
    
    
    $
    40.202nd Quarter
    
    
    44.88
    
    
    
    33.133rd Quarter
    
    
    48.67
    
    
    
    35.074th Quarter
    
    
    48.00
    
    
    
    33.70Fiscal 20061st Quarter
    
    $
    37.93
    
    
    $
    31.832nd Quarter
    
    
    45.94
    
    
    
    34.933rd Quarter
    
    
    50.45
    
    
    
    37.824th Quarter
    
    
    55.37
    
    
    
    45.12
  10




---



##### 



Issuer Purchases of Equity Securities
 (a) Total
    
    
    
    
    
    (c) Total Number of
    
    (d) Maximum Number (orNumber of
    
    
    
    
    
    Shares (or Units)
    
    Approximate Dollar Value) ofShares (or
    
    (b) Average
    
    Purchased as Part of
    
    Shares (or Units) that MayUnits)
    
    Price Paid per
    
    Publicly Announced
    
    Yet Be Purchased Under thePeriod
    
    Purchased
    
    Share (or Unit)
    
    Plans or Programs
    
    Plans or Programs(1)January 1, 2006 to
January 28, 2006
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    564,853January 29, 2006 to
February 25, 2006
    
    
    252
    
    
    $
    52.06
    
    
    
    252
    
    
    
    564,601February 26, 2006
toMarch 31, 2006
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    564,601Total
    
    
    252
    
    
    $
    52.06
    
    
    
    252
    
    
    
    564,601
    (2)
 (1)
 (2)
  11




---



##### 



Item 6. Selected Financial Data.
  Fiscal Year Ended March 31,In thousands, except per shareamounts
    
    2006
    
    2005
    
    2004
    
    2003
    
    2002Income Statement Data:Revenues:Hotline products
    
    $
    213,946
    
    
    $
    227,601
    
    
    $
    237,872
    
    
    $
    252,105
    
    
    $
    309,744On-site services(1)
    
    
    507,389
    
    
    
    307,475
    
    
    
    282,540
    
    
    
    352,912
    
    
    
    433,937Total
    
    
    721,335
    
    
    
    535,076
    
    
    
    520,412
    
    
    
    605,017
    
    
    
    743,681Cost of sales:Hotline products
    
    
    108,220
    
    
    
    108,281
    
    
    
    112,949
    
    
    
    123,470
    
    
    
    159,063On-site services(1)
    
    
    330,765
    
    
    
    211,866
    
    
    
    191,212
    
    
    
    242,700
    
    
    
    294,068Total
    
    
    438,985
    
    
    
    320,147
    
    
    
    304,161
    
    
    
    366,170
    
    
    
    453,131Gross profit
    
    
    282,350
    
    
    
    214,929
    
    
    
    216,251
    
    
    
    238,847
    
    
    
    290,550Selling, general & administrative
expenses
    
    
    205,866
    
    
    
    160,002
    
    
    
    140,805
    
    
    
    152,808
    
    
    
    181,867Restructuring and other
charges(2)
    
    
    5,290
    
    
    
    5,059
    
    
    
    --
    
    
    
    6,536
    
    
    
    3,500Intangibles amortization
(3)
    
    
    4,999
    
    
    
    1,332
    
    
    
    246
    
    
    
    377
    
    
    
    170Operating income
    
    
    66,195
    
    
    
    48,536
    
    
    
    75,200
    
    
    
    79,126
    
    
    
    105,013Interest expense, net
    
    
    9,123
    
    
    
    2,755
    
    
    
    1,808
    
    
    
    2,826
    
    
    
    6,268Income tax expense
    
    
    19,678
    
    
    
    15,754
    
    
    
    26,002
    
    
    
    27,386
    
    
    
    36,428Net income
    
    $
    37,358
    
    
    $
    29,912
    
    
    $
    47,243
    
    
    $
    48,685
    
    
    $
    62,042Basic earnings per share
    
    $
    2.18
    
    
    $
    1.72
    
    
    $
    2.60
    
    
    $
    2.46
    
    
    $
    3.11Diluted earnings per share
    
    $
    2.13
    
    
    $
    1.68
    
    
    $
    2.52
    
    
    $
    2.39
    
    
    $
    2.97Dividends declared per common share
    
    $
    0.24
    
    
    $
    0.22
    
    
    $
    0.20
    
    
    $
    0.10
    
    
    $
    --Balance Sheet Data (at end of period):Working capital (4)
    
    $
    103,256
    
    
    $
    112,536
    
    
    $
    109,431
    
    
    $
    118,592
    
    
    $
    143,464Total assets
    
    
    799,734
    
    
    
    772,890
    
    
    
    617,302
    
    
    
    626,729
    
    
    
    650,787Long-term debt
    
    
    122,673
    
    
    
    147,196
    
    
    
    35,177
    
    
    
    49,453
    
    
    
    75,497Total debt
    
    
    123,722
    
    
    
    147,888
    
    
    
    36,238
    
    
    
    50,379
    
    
    
    78,676Stockholders equity
    
    
    540,900
    
    
    
    490,701
    
    
    
    504,904
    
    
    
    494,422
    
    
    
    490,098
 (1)
 (2)
 (3)
 (4)
 12




---



##### 



Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations.
        13




---



##### 



FY05
    
    FY06
    
    FY07
    
    FY08 toP&L Impact:
    
    Total
    
    Total
    
    Total
    
    FY25Gross Profit
    
    $
    1,028
    
    
    $
    1,543
    
    
    $
    --
    
    
    $
    --SG&A
    

    
    913
    
    

    
    490
    
    
    
    --
    
    
    
    --Intangibles amortization
    

    
    759
    
    

    
    3,821
    
    
    
    672
    
    
    
    10,356Total
    

    $
    2,700
    
    

    $
    5,854
    
    
    $
    672
    
    
    $
    10,356
     14




---



##### 



Dollars in Thousands, unless Otherwise Indicated
  Year Ended March 31,2006
    
    
    2005
    
    
    2004% of total
    
    
    
    
    
    
    % of total
    
    
    
    
    
    
    % of total$
    
    
    revenues
    
    
    
    $
    
    
    revenues
    
    
    
    $
    
    
    revenuesBy GeographyRevenues:North America
    
    $
    564,700
    
    
    
    78%
    
    
    
    $
    355,013
    
    
    
    66%
    
    
    
    $
    341,299
    
    
    
    66%Europe
    
    
    120,051
    
    
    
    17%
    
    
    
    
    142,838
    
    
    
    27%
    
    
    
    
    142,158
    
    
    
    27%All Other
    
    
    36,584
    
    
    
    5%
    
    
    
    
    37,225
    
    
    
    7%
    
    
    
    
    36,955
    
    
    
    7%Total
    
    $
    721,335
    
    
    
    100%
    
    
    
    $
    535,076
    
    
    
    100%
    
    
    
    $
    520,412
    
    
    
    100%Operating Income:North America
    
    $
    53,550
    
    
    
    
    
    
    
    $
    26,798
    
    
    
    
    
    
    
    $
    44,281% of North America
revenues
    
    
    9.5%
    
    
    
    
    
    
    
    
    7.5%
    
    
    
    
    
    
    
    
    13.0%Europe
    
    
    5,518
    
    
    
    
    
    
    
    
    13,639
    
    
    
    
    
    
    
    
    21,812% of Europe revenues
    
    
    4.6%
    
    
    
    
    
    
    
    
    9.5%
    
    
    
    
    
    
    
    
    15.3%All Other
    
    
    7,127
    
    
    
    
    
    
    
    
    8,099
    
    
    
    
    
    
    
    
    9,107% of All Other
revenues
    
    
    19.5%
    
    
    
    
    
    
    
    
    21.8%
    
    
    
    
    
    
    
    
    24.6%Total
    
    $
    66,195
    
    
    
    
    
    
    
    $
    48,536
    
    
    
    
    
    
    
    $
    75,200% of Total
revenue
    
    
    9.2%
    
    
    
    
    
    
    
    
    9.1%
    
    
    
    
    
    
    
    
    14.5%Restructuring and
other charges and
reconciling items:North America
    
    $
    7,358
    
    
    
    
    
    
    
    $
    11,156
    
    
    
    
    
    
    
    $
    --Europe
    
    
    10,807
    
    
    
    
    
    
    
    
    1,003
    
    
    
    
    
    
    
    
    --All Other
    
    
    --
    
    
    
    
    
    
    
    
    --
    
    
    
    
    
    
    
    
    --Total
    
    $
    18,165
    
    
    
    
    
    
    
    $
    12,159
    
    
    
    
    
    
    
    $
    --% of Total
revenue
    
    
    2.5%
    
    
    
    
    
    
    
    
    2.2%
 15




---



##### 



Year Ended March 31,2006
    
    
    2005
    
    
    2004% of total
    
    
    
    
    
    
    % of total
    
    
    
    
    
    
    % of total$
    
    
    revenues
    
    
    
    $
    
    
    revenues
    
    
    
    $
    
    
    revenuesBy Service TypeRevenues:Data Services (1)
    
    $
    196,585
    
    
    
    27%
    
    
    
    $
    200,935
    
    
    
    38%
    
    
    
    $
    214,299
    
    
    
    41%Voice Services (1)
    
    
    310,804
    
    
    
    43%
    
    
    
    
    106,540
    
    
    
    20%
    
    
    
    
    68,241
    
    
    
    13%Hotline Services
    
    
    213,946
    
    
    
    30%
    
    
    
    
    227,601
    
    
    
    42%
    
    
    
    
    237,872
    
    
    
    46%Total
    
    $
    721,335
    
    
    
    100%
    
    
    
    $
    535,076
    
    
    
    100%
    
    
    
    $
    520,412
    
    
    
    100%Gross Profit:Data Services
    
    $
    57,068
    
    
    
    
    
    
    
    $
    59,354
    
    
    
    
    
    
    
    $
    67,329% of Data Services revenues
    
    
    29.0%
    
    
    
    
    
    
    
    
    29.5%
    
    
    
    
    
    
    
    
    31.4%Voice Services
    
    
    119,556
    
    
    
    
    
    
    
    
    36,255
    
    
    
    
    
    
    
    
    23,999% of Voice Services revenues
    
    
    38.5%
    
    
    
    
    
    
    
    
    34.0%
    
    
    
    
    
    
    
    
    35.2%Hotline Services
    
    
    105,726
    
    
    
    
    
    
    
    
    119,320
    
    
    
    
    
    
    
    
    124,923% of Hotline Services revenues
    
    
    49.4%
    
    
    
    
    
    
    
    
    52.4%
    
    
    
    
    
    
    
    
    52.5%Total
    
    $
    282,350
    
    
    
    
    
    
    
    $
    214,929
    
    
    
    
    
    
    
    $
    216,251% of Total revenues
    
    
    39.1%
    
    
    
    
    
    
    
    
    40.2%
    
    
    
    
    
    
    
    
    41.6%Reconciling items:Data Services
    
    
    $2,071
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Voice Services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Hotline Services
    
    
    1,517
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    3,588
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    % of Total revenues
    
    
    0.5%
 (1)
    
    Data Services and Voice Services may also be collectively referred to as On-Site Services
 Fiscal 2006 Compared To Fiscal 2005
 Total Revenues
  Revenues by Geography
 North America Revenues
 16




---



##### 



Europe Revenues
 All Other Revenues
 Revenue by Service Type
 Data Services
 Voice Services
 Hotline Services
 Gross Profit
  17




---



##### 



SG&A Expenses
  Restructuring and Other Charges
   Intangibles Amortization
  Operating Income
  Interest Expense, Net
  Provision for Income Taxes
  18




---



##### 



Net Income
  Fiscal 2005 Compared To Fiscal 2004
 Total Revenues
  Revenues by Geography
 North America Revenues
 Europe Revenues
 All Other Revenues
 Revenue by Service Type
 Data Services
 19




---



##### 



Voice Services
 Hotline Services
 Gross Profit
   SG&A Expenses
  Restructuring and Other Charges
  Intangibles Amortization
  20




---



##### 



Operating Income
  Interest Expense, Net
  Provision for Income Taxes
   Net Income
  Liquidity and Capital Resources
 Cash Flows from Operating Activities
   21




---



##### 



Investing Activities
    Financing Activities
  Total Debt
   22




---



##### 



Dividends
 23




---



##### 



Repurchase of Common Stock
  Foreign Currency Exchange Impact
    Contractual Obligations
 24




---



##### 



Payments Due by PeriodLess than 1
    
    
    
    
    
    
    
    
    
    
    More than 5Total
    
    
    year
    
    
    1-3 years
    
    
    3-5 years
    
    
    yearsLong-term debt
obligations
    
    $
    121,831
    
    
    $
    528
    
    
    $
    --
    
    
    $
    121,303
    
    
    $
    --Interest expense on
long-term debt
    
    
    31,331
    
    
    
    6,293
    
    
    
    12,545
    
    
    
    12,493
    
    
    
    --Capital lease
obligations
    
    
    1,891
    
    
    
    521
    
    
    
    1,123
    
    
    
    247
    
    
    
    --Operating lease
obligations
    
    
    53,850
    
    
    
    13,746
    
    
    
    20,213
    
    
    
    12,871
    
    
    
    7,019Discounted lease
rentals
    
    
    30
    
    
    
    30
    
    
    
    --
    
    
    
    --
    
    
    
    --Total contractual
obligations
    
    $
    208,933
    
    
    $
    21,118
    
    
    $
    33,881
    
    
    $
    146,914
    
    
    $
    7,019
  Amount of Commitment Expiration Per PeriodLess than 1Total
    
    
    year
    
    
    1-3 years
    
    
    3-5 years
    
    
    More than 5 yearsLetters of
credit
    
    $
    3,065
    
    
    $
    3,065
    
    
    
    --
    
    
    
    --
    
    
    
    --Total commercial
commitments
    
    $
    3,065
    
    
    $
    3,065
    
    
    
    --
    
    
    
    --
    
    
    
    --
  Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
 Accounting for Conditional Asset Retirement Obligations
 25




---



##### 



Consolidation
of Variable Interest Entities
 
 Stock-Based Compensation
 
    26




---



##### 



Foreign
Earnings Repatriation
 
    Segments
 
 Accounting
Changes and Error Corrections
 
 Critical Accounting Policies
 
 27




---



##### 



Revenue Recognition
   Allowance for Doubtful Accounts
 Inventories and Related Inventory Reserves
 Loss Contingencies
 Deferred Tax Valuation Allowances
 Long-Lived Assets
 28




---



##### 



Restructuring
 Inflation
 Forward
Looking Statements
 29




---



##### 



Item7A. Quantitative and Qualitative Disclosures About Market Risk.
  Interest
Rate Risk
 Foreign
Exchange Rate Risk
  30




---



##### 



Item8. Financial Statements and Supplementary Data.
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReports of Independent Registered Public Accounting Firms
    
    
    32Consolidated Statements of Income for the years ended March 31, 2006, 2005 and 2004
    
    
    34Consolidated Balance Sheets as of March 31, 2006 and 2005
    
    
    35Consolidated Statements of Changes in Stockholders Equity for the years ended March 31, 2006, 2005 and 2004
    
    
    36Consolidated Statements of Cash Flows for the years ended March 31, 2006, 2005 and 2004
    
    
    37Notes to Consolidated Financial Statements
    
    
    38
 31




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     Internal Control  Integrated
Framework
  
 32




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      
 33




---



##### 



BLACK BOX CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
 Year Ended March 31,In thousands, except per share amounts
    
    2006
    
    2005
    
    2004RevenuesHotline products
    
    $
    213,946
    
    
    $
    227,601
    
    
    $
    237,872On-site services
    
    
    507,389
    
    
    
    307,475
    
    
    
    282,540Total
    
    
    721,335
    
    
    
    535,076
    
    
    
    520,412Cost of salesHotline products
    
    
    108,220
    
    
    
    108,281
    
    
    
    112,949On-site services
    
    
    330,765
    
    
    
    211,866
    
    
    
    191,212Total
    
    
    438,985
    
    
    
    320,147
    
    
    
    304,161Gross profit
    
    
    282,350
    
    
    
    214,929
    
    
    
    216,251Selling, general and administrative expenses
    
    
    205,866
    
    
    
    160,002
    
    
    
    140,805Restructuring and other charges
    
    
    5,290
    
    
    
    5,059
    
    
    
    --Intangibles amortization
    
    
    4,999
    
    
    
    1,332
    
    
    
    246Operating income
    
    
    66,195
    
    
    
    48,536
    
    
    
    75,200Interest expense, net
    
    
    9,123
    
    
    
    2,755
    
    
    
    1,808Other expense, net
    
    
    36
    
    
    
    115
    
    
    
    147Income before provision for income taxes
    
    
    57,036
    
    
    
    45,666
    
    
    
    73,245Provision for income taxes
    
    
    19,678
    
    
    
    15,754
    
    
    
    26,002Net income
    
    $
    37,358
    
    
    $
    29,912
    
    
    $
    47,243Earnings per common shareBasic
    
    $
    2.18
    
    
    $
    1.72
    
    
    $
    2.60Diluted
    
    $
    2.13
    
    
    $
    1.68
    
    
    $
    2.52Weighted average common shares outstandingBasic
    
    
    17,164
    
    
    
    17,411
    
    
    
    18,173Diluted
    
    
    17,544
    
    
    
    17,845
    
    
    
    18,766Dividends per share
    
    $
    0.24
    
    
    $
    0.22
    
    
    $
    0.20
 See Notes to Consolidated Financial Statements
 34




---



##### 



BLACK BOX CORPORATION
CONSOLIDATED BALANCE SHEETS
 March 31,In thousands, except par value
    
    2006
    
    2005AssetsCash and cash equivalents
    
    $
    11,207
    
    
    $
    11,592Trade accounts receivable, net of allowance for doubtful accounts
of
$9,517 and $7,342
    
    
    116,713
    
    
    
    116,865Lease receivables (Note 2)
    
    
    512
    
    
    
    1,697Inventories, net (Note 3)
    
    
    53,926
    
    
    
    57,176Costs and estimated earnings in excess of billings on uncompleted
contracts
    
    
    23,803
    
    
    
    25,695Deferred tax asset
    
    
    8,973
    
    
    
    9,236Net current assets of discontinued operations
    
    
    467
    
    
    
    549Other current assets
    
    
    15,523
    
    
    
    14,724Total current assets
    
    
    231,124
    
    
    
    237,534Property, plant and equipment, net (Note 4)
    
    
    35,124
    
    
    
    38,268Goodwill, net (Note 5)
    
    
    468,724
    
    
    
    444,567Other intangibles, net (Note 5)
    
    
    55,440
    
    
    
    44,157Lease receivables, net of current portion
    
    
    --
    
    
    
    473Deferred tax asset
    
    
    4,231
    
    
    
    3,793Discontinued operations, net of current portion
    
    
    --
    
    
    
    373Other assets
    
    
    5,091
    
    
    
    3,725Total assets
    
    $
    799,734
    
    
    $
    772,890LiabilitiesCurrent maturities of long-term debt (Note 6)
    
    $
    1,049
    
    
    $
    692Current
maturities of discounted lease rentals (Note 7)
    
    
    30
    
    
    
    890Accounts payable
    
    
    44,943
    
    
    
    36,032Billings in excess of costs and estimated earnings on uncompleted
contracts
    
    
    8,648
    
    
    
    8,947Deferred revenue
    
    
    22,211
    
    
    
    21,456Accrued liabilities:Compensation and benefits
    
    
    13,954
    
    
    
    14,270Restructuring
reserve (Note 17)
    
    
    3,292
    
    
    
    6,709Other liabilities
    
    
    27,817
    
    
    
    32,708Income taxes
    
    
    5,924
    
    
    
    3,295Total current liabilities
    
    
    127,868
    
    
    
    124,999Long-term debt (Note 6)
    
    
    122,673
    
    
    
    147,196Discounted lease rentals
    
    
    --
    
    
    
    30Other liabilities
    
    
    887
    
    
    
    75Restructuring reserve (Note 17)
    
    
    7,406
    
    
    
    9,889Stockholders EquityPreferred stock authorized 5,000, par value $1.00, none issued
    
    
    --
    
    
    
    --Common stock authorized 100,000, par value $.001, 17,593 and
16,840 shares outstanding
    
    
    25
    
    
    
    24Additional paid-in capital
    
    
    362,810
    
    
    
    336,290Retained earnings
    
    
    461,853
    
    
    
    428,632Treasury stock, at cost, 6,935 and 6,935 shares
    
    
    (296,824
    )
    
    
    (296,797
    )Accumulated other comprehensive income
    
    
    13,036
    
    
    
    22,552Total stockholders equity
    
    
    540,900
    
    
    
    490,701Total liabilities and stockholders equity
    
    $
    799,734
    
    
    $
    772,890
 See Notes to Consolidated Financial Statements
 35




---



##### 



BLACK BOX CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
 AccumulatedCommon Stock
    
    Additional
    
    
    
    
    
    
    
    
    
    OtherIn thousands, except share
    
    
    
    
    
    
    
    
    
    Paid-in
    
    Retained
    
    Treasury
    
    Comprehensiveamounts
    
    Shares
    
    Amount
    
    Capital
    
    Earnings
    
    Stock
    
    Income
    
    TotalBalance at March 31, 2003
    
    
    22,594,034
    
    
    $
    23
    
    
    $
    295,271
    
    
    $
    359,037
    
    
    $
    (163,547
    )
    
    $
    3,638
    
    
    $
    494,422Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,243
    
    
    
    
    
    
    
    
    
    
    
    47,243Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,013
    
    
    
    14,013Unrealized gains on
derivatives designated and
qualified as cash flow
hedges, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    454
    
    
    
    454Reclassification of
unrealized gains on expired
derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (233
    )
    
    
    (233
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61,477Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,605
    )
    
    
    
    
    
    
    
    
    
    
    (3,605
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (76,338
    )
    
    
    
    
    
    
    (76,338
    )Exercise of options, net of
tax
    
    
    799,644
    
    
    
    
    
    
    
    22,159
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,159Tax benefit from exercised
options
    
    
    
    
    
    
    
    
    
    
    6,789
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,789Balance at March 31, 2004
    
    
    23,393,678
    
    
    
    23
    
    
    
    324,219
    
    
    
    402,675
    
    
    
    (239,885
    )
    
    
    17,872
    
    
    
    504,904Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,912
    
    
    
    
    
    
    
    
    
    
    
    29,912Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,281
    
    
    
    5,281Unrealized losses on
derivatives designated and
qualified as cash flow
hedges, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (147
    )
    
    
    (147
    )Reclassification of
unrealized gains on
expired derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (454
    )
    
    
    (454
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,592Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    680
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    680Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,955
    )
    
    
    
    
    
    
    
    
    
    
    (3,955
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (56,912
    )
    
    
    
    
    
    
    (56,912
    )Exercise of options, net of
tax
    
    
    381,272
    
    
    
    1
    
    
    
    7,919
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,920Tax benefit from exercised
options
    
    
    
    
    
    
    
    
    
    
    3,472
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,472Balance at March 31, 2005
    
    
    23,774,950
    
    
    
    24
    
    
    
    336,290
    
    
    
    428,632
    
    
    
    (296,797
    )
    
    
    22,552
    
    
    
    490,701Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,358
    
    
    
    
    
    
    
    
    
    
    
    37,358Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,511
    )
    
    
    (10,511
    )Unrealized gains on
derivatives designated and
qualified as cash flow
hedges, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,142
    
    
    
    1,142Reclassification of unrealized
gains on expired derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (147
    )
    
    
    (147
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,842Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,137
    )
    
    
    
    
    
    
    
    
    
    
    (4,137
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27
    )
    
    
    
    
    
    
    (27
    )Exercise of options, net of
tax
    
    
    753,487
    
    
    
    1
    
    
    
    23,320
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,321Tax benefit from exercised
options
    
    
    
    
    
    
    
    
    
    
    3,200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,200Balance at March 31, 2006
    
    
    24,528,437
    
    
    $
    25
    
    
    $
    362,810
    
    
    $
    461,853
    
    
    $
    (296,824
    )
    
    $
    13,036
    
    
    $
    540,900
 See Notes to Consolidated Financial Statements
 36




---



##### 



BLACK BOX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Year Ended March 31,In thousands
    
    2006
    
    2005
    
    2004Operating ActivitiesNet income
    
    $
    37,358
    
    
    $
    29,912
    
    
    $
    47,243Adjustments to reconcile net income to cash
provided
by operating activities:Depreciation and amortization
    
    
    13,930
    
    
    
    7,955
    
    
    
    6,765Gain on disposal of assets
    
    
    --
    
    
    
    --
    
    
    
    (531
    )Deferred tax (benefit)/provision
    
    
    (212
    )
    
    
    (77
    )
    
    
    2,386Stock compensation expense
    
    
    --
    
    
    
    680
    
    
    
    --Tax benefit from exercised options
    
    
    (3,200
    )
    
    
    (3,472
    )
    
    
    (6,789
    )Changes in operating assets and liabilities (net
of acquisitions):Accounts receivable, net
    
    
    9,369
    
    
    
    8,878
    
    
    
    7,486Inventories, net
    
    
    5,000
    
    
    
    (76
    )
    
    
    1,144Other current assets
    
    
    7,541
    
    
    
    3,307
    
    
    
    16,455Proceeds from lease contracts
    
    
    1,658
    
    
    
    504
    
    
    
    --Accounts payable and accrued liabilities
    
    
    (19,647
    )
    
    
    4,595
    
    
    
    796Net cash provided by operating activities
    
    
    51,797
    
    
    
    52,206
    
    
    
    74,955Investing ActivitiesCapital expenditures
    
    
    (4,115
    )
    
    
    (3,506
    )
    
    
    (1,673
    )Capital disposals
    
    
    1,445
    
    
    
    1,187
    
    
    
    1,851Acquisition of businesses, net of cash acquired
    
    
    (40,682
    )
    
    
    (102,553
    )
    
    
    --Prior merger-related recovery/(payments)
    
    
    (378
    )
    
    
    107
    
    
    
    (3,010
    )Net cash used in investing activities
    
    
    (43,730
    )
    
    
    (104,765
    )
    
    
    (2,832
    )Financing ActivitiesRepayment of borrowings
    
    
    (218,989
    )
    
    
    (127,959
    )
    
    
    (229,914
    )Proceeds from borrowings
    
    
    192,882
    
    
    
    238,409
    
    
    
    215,600Repayments on discounted lease rentals
    
    
    (890
    )
    
    
    (458
    )
    
    
    --Proceeds from the exercise of options
    
    
    23,320
    
    
    
    7,919
    
    
    
    22,159Payment of dividends
    
    
    (4,094
    )
    
    
    (3,847
    )
    
    
    (3,663
    )Deferred financing costs
    
    
    (180
    )
    
    
    (1,352
    )
    
    
    --Purchase of treasury stock
    
    
    (27
    )
    
    
    (56,912
    )
    
    
    (81,057
    )Net cash
(used)/provided by financing activities
    
    
    (7,978
    )
    
    
    55,800
    
    
    
    (76,875
    )Foreign currency exchange impact on cash
    
    
    (474
    )
    
    
    (955
    )
    
    
    15(Decrease)/increase in cash and
cash equivalents
    
    
    (385
    )
    
    
    2,286
    
    
    
    (4,737
    )Cash and cash equivalents at beginning of year
    
    
    11,592
    
    
    
    9,306
    
    
    
    14,043Cash and cash equivalents at end of year
    
    $
    11,207
    
    
    $
    11,592
    
    
    $
    9,306Supplemental Cash Flow:Cash paid for interest
    
    $
    8,336
    
    
    $
    3,045
    
    
    $
    1,808Cash paid for income taxes
    
    
    17,223
    
    
    
    17,064
    
    
    
    25,176Non-cash financing activities:Dividends payable
    
    
    1,055
    
    
    
    1,011
    
    
    
    903Capital leases
    
    
    1,214
    
    
    
    714
    
    
    
    --
 See Notes to Consolidated Financial Statements
 37




---



##### 



BLACK BOX CORPORATION
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Dollars in thousands, except per share amounts)
 Note 1: Significant Accounting Policies
 Principles of Consolidation
 Use of Estimates
 Allowance for doubtful accounts receivable:
 Sales returns:
 Inventory valuation:
 Loss
Contingencies:
 Warranties:
 Intangible
Assets:
 Cash and Cash Equivalents
 Inventories
 Property, Plant and Equipment
 38




---



##### 



Goodwill and Other Intangible Assets
   Income Taxes
 Risk Management and Financial Derivatives
  39




---



##### 



Foreign Currency Translation
 Revenue Recognition
   Shipping and Handling Fees and Costs
 Advertising Costs
 Stock-Based Compensation
 40




---



##### 



2006
    
    2005
    
    2004Net income:
    
    As reported
    
    $
    37,358
    
    
    $
    29,912
    
    
    $
    47,243Plus:
    
    Stock-based
compensation expense
included in reported
net income, net of
related tax
    
    
    --
    
    
    
    445
    
    
    
    --Less:
    
    Stock-based
compensation expense
determined by the
fair value method
for all awards, net
of related tax
    
    
    (23,972
    )
    
    
    (9,492
    )
    
    
    (9,881
    )Pro forma
    
    $
    13,386
    
    
    $
    20,865
    
    
    $
    37,362Earnings per share:
    
    Basic  as reported
    
    $
    2.18
    
    
    $
    1.72
    
    
    $
    2.60Basic  pro forma
    
    $
    0.78
    
    
    $
    1.20
    
    
    $
    2.06Diluted  as
reported
    
    $
    2.13
    
    
    $
    1.68
    
    
    $
    2.52Diluted  pro forma
    
    $
    0.76
    
    
    $
    1.17
    
    
    $
    1.99
  2006
    
    2005
    
    2004Expected life (in
years)
    
    
    5.6
    
    
    
    5.1
    
    
    
    5.1Risk free interest rate
    
    
    4.2%
    
    
    
    3.5%
    
    
    
    3.0%Volatility
    
    
    49%
    
    
    
    60%
    
    
    
    61%Dividend yield
    
    
    0.6%
    
    
    
    0.6%
    
    
    
    0.5%
   Earnings Per Share
 Reclassification
 41




---



##### 



Recent Accounting Pronouncements
 Accounting for Conditional Asset Retirement Obligations
 Consolidation of Variable Interest Entities
 Stock-Based Compensation
  42




---



##### 



Foreign Earnings Repatriation
    Segments
 Accounting Changes and Error Corrections
 43




---



##### 



Note 2: Lease Receivables
   March2006
    
    2005Gross lease receivables
    
    $
    730
    

    
    $
    2,697Residual values
    
    
    94
    
    
    
    219Less:Unearned income
    
    
    (236
    )
    
    
    (553
    )Allowance for financing losses
    
    
    (76
    )
    
    
    (193
    )Total lease receivables, net
    
    
    512
    
    
    
    2,170Less  current maturities
    
    
    512
    
    
    
    1,697Long-term lease receivables
    
    $
    --
    
    
    $
    473
  Years Ending March 31,2007
    
    $
    6362008
    
    
    94$
    730
 Note 3: Inventories
  March 312006
    
    2005Raw materials
    
    $
    1,426
    
    
    $
    1,447Finished goods
    
    
    66,787
    
    
    
    68,275Subtotal
    
    
    68,213
    
    
    
    69,722Excess and obsolete inventory
reserves
    
    
    (14,287
    )
    
    
    (12,546
    )Inventory, net
    
    $
    53,926
    
    
    $
    57,176
 44




---



##### 



Note 4: Property, Plant And Equipment
  March 312006
    
    2005Land
    
    $
    2,369
    
    
    $
    2,554Building and improvements
    
    
    26,052
    
    
    
    26,019Machinery
    
    
    58,562
    
    
    
    58,238Subtotal
    
    
    86,983
    
    
    
    86,811Accumulated depreciation
    
    
    (51,859
    )
    
    
    (48,543
    )Property, plant and equipment,
net
    
    $
    35,124
    
    
    $
    38,268
  Note 5: Goodwill and Other Intangible Assets
    NorthAmerica
    
    Europe
    
    All Other
    
    TotalBalance as of March 31, 2004
    
    $
    311,540
    
    
    $
    67,358
    
    
    $
    1,871
    
    
    $
    380,769Currency translation
    
    
    45
    
    
    
    3,099
    
    
    
    15
    
    
    
    3,159Goodwill on businesses
acquired
    
    
    60,416
    
    
    
    --
    
    
    
    --
    
    
    
    60,416Actual earnout payments
    
    
    --
    
    
    
    277
    
    
    
    82
    
    
    
    359Other
    
    
    (136
    )
    
    
    --
    
    
    
    --
    
    
    
    (136
    )Balance as of March 31, 2005
    
    
    371,865
    
    
    
    70,734
    
    
    
    1,968
    
    
    
    444,567Currency translation
    
    
    24
    
    
    
    (5,271
    )
    
    
    33
    
    
    
    (5,214
    )Goodwill on businesses
acquired
    
    
    28,993
    
    
    
    --
    
    
    
    --
    
    
    
    28,993Actual earnout payments
    
    
    --
    
    
    
    --
    
    
    
    41
    
    
    
    41Other
    
    
    116
    
    
    
    221
    
    
    
    --
    
    
    
    337Balance as of March 31, 2006
    
    $
    400,998
    
    
    $
    65,684
    
    
    $
    2,042
    
    
    $
    468,724
  45




---



##### 



March 31, 2006
    
    March 31, 2005Gross
    
    
    
    
    
    Net
    
    Gross
    
    
    
    
    
    NetCarrying
    
    Accum.
    
    Carrying
    
    Carrying
    
    Accum.
    
    CarryingAmount
    
    Amort.
    
    Amount
    
    Amount
    
    Amort.
    
    AmountNon-compete
agreements
    
    $
    4,894
    
    
    $
    1,851
    
    
    $
    3,043
    
    
    $
    2,676
    
    
    $
    1,105
    
    
    $
    1,571Customer
relationships
    
    
    25,654
    
    
    
    997
    
    
    
    24,657
    
    
    
    11,699
    
    
    
    114
    
    
    
    11,585Acquired backlog
    
    
    3,935
    
    
    
    3,934
    
    
    
    1
    
    
    
    3,930
    
    
    
    668
    
    
    
    3,262Total
    
    $
    34,483
    
    
    $
    6,782
    
    
    $
    27,701
    
    
    $
    18,305
    
    
    $
    1,887
    
    
    $
    16,418
   Years Ending March 31,2007
    
    $
    2,1352008
    
    
    2,0972009
    
    
    1,9532010
    
    
    1,9032011
    
    
    995Thereafter
    
    
    18,618$
    27,701
   Non-Competes and
    
    CustomerTrademarks
    
    Backlog
    
    Relationships
    
    Goodwill
    
    TotalBalance as of March 31,
2005
    
    $
    27,739
    
    
    $
    4,833
    
    
    $
    11,585
    
    
    $
    444,567
    
    
    $
    488,724Change in net intangible
assets during the period
related to:Amortization expense
    
    
    --
    
    
    
    (4,116
    )
    
    
    (883
    )
    
    
    --
    
    
    
    (4,999
    )Currency translation
    
    
    --
    
    
    
    (24
    )
    
    
    --
    
    
    
    (5,214
    )
    
    
    (5,238
    )Acquisitions
    
    
    --
    
    
    
    2,351
    
    
    
    13,955
    
    
    
    30,668
    
    
    
    46,974Adjustment on previous
acquisitions
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    (1,675
    )
    
    
    (1,675
    )Other
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    378
    
    
    
    378Balance as of March 31,
2006
    
    $
    27,739
    
    
    $
    3,044
    
    
    $
    24,657
    
    
    $
    468,724
    
    
    $
    524,164
 46




---



##### 



Note 6: Indebtedness
  March 31,2006
    
    2005Revolving credit
agreement
    
    $
    121,303
    
    
    $
    146,560Capital lease obligations
    
    
    1,891
    
    
    
    772Other
    
    
    528
    
    
    
    556Total debt
    
    
    123,722
    
    
    
    147,888Less: current portion
    
    
    (1,049
    )
    
    
    (692
    )Long-term debt
    
    $
    122,673
    
    
    $
    147,196
    47




---



##### 



Years Ending March 31,2007
    
    $
    1,0492008
    
    
    5962009
    
    
    5272010
    
    
    2472011
    
    
    121,303Thereafter
    
    
    --$
    123,722
 48




---



##### 



Note 7: Discounted Lease Rentals
   March2006
    
    2005Total discounted lease rentals
    
    $
    30
    
    
    $
    920Less  current maturities
    
    
    (30
    )
    
    
    (890
    )Long-term discounted lease
rentals
    
    $
    --
    
    
    $
    30
 Note 8: Derivative Instruments and Hedging Activities
    49




---



##### 



Note 9: Operating Leases
   Years Ending March, 312007
    
    $
    13,7462008
    
    
    11,3062009
    
    
    8,9082010
    
    
    7,1022011
    
    
    5,769Thereafter
    
    
    7,019$
    53,850
   Note 10: Discontinued Operations
   March2006
    
    2005Assets:Cash, accounts receivable and inventories
    
    $
    81
    
    
    $
    125Notes receivable and property
    
    
    386
    
    
    
    826Liabilities:Other liabilities
    
    
    --
    
    
    
    (29
    )Net assets of discontinued operations
    
    
    467
    
    
    
    922Less: current portion liabilities (assets)
    
    
    (467
    )
    
    
    (549
    )Net non-current assets (liabilities) of discontinued
operations
    
    $
    --
    
    
    $
    373
 50




---



##### 



Note 11: Income Taxes
  2006
    
    2005
    
    2004Domestic
    
    $
    40,231
    
    
    $
    35,773
    
    
    $
    59,516Foreign
    
    
    16,805
    
    
    
    9,893
    
    
    
    13,729Consolidated
    
    $
    57,036
    
    
    $
    45,666
    
    
    $
    73,245
  2006
    
    2005
    
    2004Current:Federal
    
    $
    11,506
    
    
    $
    12,784
    
    
    $
    20,356State
    
    
    1,230
    
    
    
    1,118
    
    
    
    1,151Foreign
    
    
    5,038
    
    
    
    3,449
    
    
    
    4,629Total current
    
    
    17,774
    
    
    
    17,351
    
    
    
    26,136Deferred
    
    
    1,904
    
    
    
    (1,597
    )
    
    
    (134
    )Total provision for income
taxes
    
    $
    19,678
    
    
    $
    15,754
    
    
    $
    26,002
  2006
    
    2005
    
    2004Federal statutory tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Foreign taxes, net of foreign tax credits
    
    
    --
    
    
    
    0.6
    
    
    
    1.0Effect of permanent book/tax differences
    
    
    2.2
    
    
    
    1.0
    
    
    
    (0.9
    )State income taxes, net of federal
benefit
    
    
    0.8
    
    
    
    (0.2
    )
    
    
    0.6Valuation allowance
    
    
    (2.5
    )
    
    
    (2.7
    )
    
    
    --Other, net
    
    
    (1.0
    )
    
    
    0.8
    
    
    
    (0.2
    )Effective tax rate
    
    
    34.5
    %
    
    
    34.5
    %
    
    
    35.5
    %
 51




---



##### 



2006
    
    2005Deferred Tax Liabilities:Tradename and trademarks
    
    $
    9,684
    
    
    $
    9,685Amortization of intangibles
    
    
    8,940
    
    
    
    7,385Unrequited earnings of Japanese
subsidiary
    
    
    2,109
    
    
    
    1,283Basis of fixed assets
    
    
    4,586
    
    
    
    4,089Other
    
    
    22
    
    
    
    --Gross deferred tax liabilities
    
    
    25,341
    
    
    
    22,442Deferred Tax Assets:Net operating losses
    
    
    16,519
    
    
    
    15,752Restructuring reserves
    
    
    6,462
    
    
    
    6,090Outsourced leases
    
    
    6,403
    
    
    
    6,403Basis of finished goods inventory
    
    
    3,166
    
    
    
    2,541Reserve for bad debts
    
    
    2,796
    
    
    
    2,704Miscellaneous accrued expenses
    
    
    230
    
    
    
    1,372Foreign tax credit carryforwards
    
    
    2,109
    
    
    
    1,283Accrued employee costs
    
    
    1,093
    
    
    
    912Foreign exchange
    
    
    719
    
    
    
    719Other
    
    
    --
    
    
    
    62Gross deferred tax assets
    
    
    39,497
    
    
    
    37,838Valuation allowance
    
    
    (952
    )
    
    
    (2,367
    )Net deferred tax assets
    
    
    38,545
    
    
    
    35,471Net deferred tax assets/(liabilities)
    
    $
    13,204
    
    
    $
    13,029
    52




---



##### 



Note 12: Incentive Compensation Plans
 Performance Bonus
 Profit Sharing And Savings Plan
 Stock Option Plans
   2006
    
    2005
    
    2004Weighted
    
    
    
    
    
    Weighted
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    Average
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    Exercise
    
    
    
    
    
    ExerciseShares in thousands
    
    Shares
    
    Price
    
    Shares
    
    Price
    
    Shares
    
    PriceOutstanding at beginning of year
    
    
    4,780
    
    
    $
    37.14
    
    
    
    4,414
    
    
    $
    36.40
    
    
    
    4,487
    
    
    $
    34.30Granted
    
    
    1,256
    
    
    
    38.51
    
    
    
    924
    
    
    
    34.86
    
    
    
    911
    
    
    
    39.68Exercised
    
    
    (753
    )
    
    
    30.95
    
    
    
    (381
    )
    
    
    20.78
    
    
    
    (799
    )
    
    
    27.71Forfeited
    
    
    (228
    )
    
    
    39.84
    
    
    
    (177
    )
    
    
    42.01
    
    
    
    (185
    )
    
    
    39.01Outstanding at end of year
    
    
    5,055
    
    
    $
    38.28
    
    
    
    4,780
    
    
    $
    37.14
    
    
    
    4,414
    
    
    $
    36.40Exercisable at end of year
    
    
    4,247
    
    
    $
    39.07
    
    
    
    3,143
    
    
    $
    37.33
    
    
    
    2,935
    
    
    $
    34.93Weighted average incremental
fair value of options granted
during the year using
Black-Scholes option pricing
model
    
    
    
    
    
    $
    18.33
    
    
    
    
    
    
    $
    18.19
    
    
    
    
    
    
    $
    20.00
 53




---



##### 



Options Outstanding
    
    Options ExercisableWeightedAverage
    
    Weighted
    
    
    
    
    
    WeightedRemaining
    
    Average
    
    
    
    
    
    AverageRange of
    
    Shares
    
    Contractual
    
    Exercise
    
    Shares
    
    ExerciseExercise Prices
    
    Outstanding
    
    Life
    
    Price
    
    Exercisable
    
    Price$19.9500 -
$26.60
    
    
    328,335
    
    
    1.9 years
    
    
    $22.47
    
    
    
    328,335
    
    
    
    $22.47$26.6001 -
$33.25
    
    
    367,329
    
    
    3.1 years
    
    
    30.07
    
    
    
    364,528
    
    
    
    30.07$33.2501 -
$39.90
    
    
    1,985,052
    
    
    9.0 years
    
    
    36.93
    
    
    
    1,179,109
    
    
    
    38.82$39.9001 -
$46.55
    
    
    2,215,840
    
    
    5.7 years
    
    
    42.38
    
    
    
    2,215,840
    
    
    
    42.38$46.5501 -
$53.20
    
    
    155,120
    
    
    3.6 years
    
    
    49.39
    
    
    
    155,120
    
    
    
    49.39$53.2001 -
$59.85
    
    
    1,668
    
    
    3.8 years
    
    
    55.88
    
    
    
    1,668
    
    
    
    55.88$59.8501 -
$66.50
    
    
    2,000
    
    
    3.7 years
    
    
    63.22
    
    
    
    2,000
    
    
    
    63.22$19.95
    - $66.50
    
    
    5,055,344
    
    
    6.5 years
    
    
    $38.28
    
    
    
    4,246,600
    
    
    
    $39.07
 Note 13: Earnings Per Share
  2006
    
    2005
    
    2004Net income, as reported
    
    $
    37,358
    
    
    $
    29,912
    
    
    $
    47,243Weighted average shares outstanding
    
    
    17,164
    
    
    
    17,411
    
    
    
    18,173Effect of dilutive securities from
employee stock options, net of tax
savings
    
    
    380
    
    
    
    434
    
    
    
    593Weighted average diluted shares
outstanding
    
    
    17,544
    
    
    
    17,845
    
    
    
    18,766Basic earnings per share
    
    $
    2.18
    
    
    $
    1.72
    
    
    $
    2.60Dilutive earnings per share
    
    $
    2.13
    
    
    $
    1.68
    
    
    $
    2.52
  Note 14: Repurchase of Common Stock
   54




---



##### 



Note 15: Comprehensive Income
  2006
    
    2005Foreign currency translation adjustment
    
    $
    12,041
    
    
    $
    22,699Unrealized (losses)/gains on derivatives designated
and qualified as cash flow hedges, net of
reclassification of unrealized losses on expired
derivatives, net of tax
    
    
    995
    
    
    
    (147
    )Total accumulated other comprehensive income
    
    $
    13,036
    
    
    $
    22,552
 Note 16: Commitments and Contingencies
 Litigation
  Product Warranties
 
 March 31,2006
    
    2005
    
    2004Beginning balance
    
    $
    1,895
    
    
    $
    422
    
    
    $
    184Increases to warranty reserve
    
    
    62
    
    
    
    233
    
    
    
    360Increases to reserve from acquisitions
    
    
    --
    
    
    
    1,683
    
    
    
    --Decreases for service costs
    
    
    (574
    )
    
    
    (443
    )
    
    
    (122
    )Ending balance
    
    $
    1,383
    
    
    $
    1,895
    
    
    $
    422
  Note 17: Restructuring and Other Charges
   55




---



##### 



Employee Severance
    
    Facility Closures
    
    TotalAccrued March 31, 2004
    
    
    $        352
    
    
    

$          241
    
    
    

$          593Restructuring charge
    
    
    613
    
    
    
    2,406
    
    
    
    3,019Acquisition
restructuring
    
    
    2,887
    
    
    
    11,874
    
    
    
    14,761Asset write-downs
    
    
    --
    
    
    
    (122
    )
    
    
    (122
    )Cash expenditures
    
    
    (1,063
    )
    
    
    (590
    )
    
    
    (1,653
    )Accrued at March 31,
2005
    
    
    2,789
    
    
    
    13,809
    
    
    
    16,598Restructuring charge
    
    
    3,473
    
    
    
    1,817
    
    
    
    5,290Acquisition
restructuring
    
    
    66
    
    
    
    298
    
    
    
    364Asset write-downs
    
    
    --
    
    
    
    (636
    )
    
    
    (636
    )Cash expenditures
    
    
    (6,068
    )
    
    
    (4,850
    )
    
    
    (10,918
    )Accrued at March 31,
2006
    
    
    $        260
    
    
    
    $     10,438
    
    
    
    $     10,698
  56




---



##### 



Note 18: Acquisitions
 Fiscal 2006
    Fiscal 2005
 57




---



##### 



At January 25, 2005Current assets, primarily consisting of accounts receivable and inventories
    
    
    $     71,141Property, plant and equipment
    
    
    12,649Other non-current assets, primarily consisting of deferred taxes
    
    
    18,779Intangible assets
    
    
    15,971Goodwill
    
    
    58,741Total assets acquired
    
    
    177,281Current liabilities, primarily consisting of deferred revenue and accrued
expenses
    
    
    61,128Other non-current liabilities, primarily consisting of restructuring accrual
    
    

8,744Net assets acquired
    
    
    $   107,409
  Non-compete agreements
    
    $
    342Backlog
    
    
    3,930Customer relationships
    
    
    11,699Total intangible
assets
    
    $
    15,971
     Year EndedMarch 31, 2005
    
    March 31, 2004Pro forma revenue
    
    $
    716,853
    
    
    $
    746,261Pro forma net income from continuing
operations
    
    
    22,451
    
    
    
    32,732Pro forma earnings per share:Basic
    
    $
    1.29
    
    
    $
    1.80Diluted
    
    $
    1.26
    
    
    $
    1.74
 58




---



##### 



Note 19: Segment Reporting
    2006
    
    2005
    
    2004North AmericaRevenues
    
    $
    564,700
    
    
    $
    355,013
    
    
    $
    341,299Operating
income
    
    
    53,550
    
    
    
    26,798
    
    
    
    44,281Depreciation
    
    
    8,012
    
    
    
    5,144
    
    
    
    4,515Amortization
    
    
    4,472
    
    
    
    878
    
    
    
    46Segment assets
    
    
    745,746
    
    
    
    705,762
    
    
    
    557,239EuropeRevenues
    
    $
    120,051
    
    
    $
    142,838
    
    
    $
    142,158Operating
income
    
    
    5,518
    
    
    
    13,639
    
    
    
    21,812Depreciation
    
    
    671
    
    
    
    1,213
    
    
    
    1,670Amortization
    
    
    491
    
    
    
    398
    
    
    
    177Segment assets
    
    
    116,717
    
    
    
    134,982
    
    
    
    131,302All OtherRevenues
    
    $
    36,584
    
    
    $
    37,225
    
    
    $
    36,955Operating
income
    
    
    7,127
    
    
    
    8,099
    
    
    
    9,107Depreciation
    
    
    248
    
    
    
    266
    
    
    
    334Amortization
    
    
    36
    
    
    
    56
    
    
    
    23Segment assets
    
    
    16,416
    
    
    
    15,357
    
    
    
    15,981
   59




---



##### 



2006
    
    2005
    
    2004Assets for North America, Europe
and
All Other segments
    
    $
    878,879
    
    
    $
    856,101
    
    
    $
    704,522Corporate eliminations
    
    
    (79,145
    )
    
    
    (83,211
    )
    
    
    (88,233
    )Total consolidated assets
    
    $
    799,734
    
    
    $
    772,890
    
    
    $
    616,289
  Revenues
    
    2006
    
    2005
    
    2004Data Services (1)
    
    $
    196,585
    
    
    $
    200,935
    
    
    $
    214,299Voice Services (1)
    
    
    310,804
    
    
    
    106,540
    
    
    
    68,241Hotline Products
    
    
    213,946
    
    
    
    227,601
    
    
    
    237,872Total revenues
    
    $
    721,335
    
    
    $
    535,076
    
    
    $
    520,412
 (1)
    
    Data Services and Voice Services are also collectively referred to as On-Site Services.
 60




---



##### 



Note 20: Quarterly Data (Unaudited)
 First
    
    Second
    
    Third
    
    FourthQuarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    YearFiscal 2006RevenuesHotline products
    
    $
    53,452
    
    
    $
    54,056
    
    
    $
    52,771
    
    
    $
    53,667
    
    
    $
    213,946On-site services
    
    
    125,830
    
    
    
    130,994
    
    
    
    129,364
    
    
    
    121,201
    
    
    
    507,389Total
    
    
    179,282
    
    
    
    185,050
    
    
    
    182,135
    
    
    
    174,868
    
    
    
    721,335Gross profitHotline products
    
    
    27,578
    
    
    
    27,227
    
    
    
    26,463
    
    
    
    24,458
    
    
    
    105,726On-site services
    
    
    43,362
    
    
    
    46,655
    
    
    
    46,939
    
    
    
    39,668
    
    
    
    176,624Total
    
    
    70,940
    
    
    
    73,882
    
    
    
    73,402
    
    
    
    64,126
    
    
    
    282,350Net income
    
    $
    7,394
    
    
    $
    12,797
    
    
    $
    12,511
    
    
    $
    4,656
    
    
    $
    37,358Basic earnings per
common share
    
    
    0.44
    
    
    
    0.75
    
    
    
    0.72
    
    
    
    0.26
    
    
    
    2.18
    (1)Diluted earnings
per common share
    
    
    0.43
    
    
    
    0.74
    
    
    
    0.70
    
    
    
    0.26
    
    
    
    2.13
    (1)Fiscal 2005RevenuesHotline products
    
    $
    57,852
    
    
    $
    56,972
    
    
    $
    57,267
    
    
    $
    55,510
    
    
    $
    227,601On-site services
    
    
    66,503
    
    
    
    69,623
    
    
    
    69,629
    
    
    
    101,720
    
    
    
    307,475Total
    
    
    124,355
    
    
    
    126,595
    
    
    
    126,896
    
    
    
    157,230
    
    
    
    535,076Gross profitHotline products
    
    
    30,978
    
    
    
    30,217
    
    
    
    29,400
    
    
    
    28,725
    
    
    
    119,320On-site services
    
    
    20,902
    
    
    
    22,098
    
    
    
    21,618
    
    
    
    30,991
    
    
    
    95,609Total
    
    
    51,880
    
    
    
    52,315
    
    
    
    51,018
    
    
    
    59,716
    
    
    
    214,929Net income
    
    $
    10,003
    
    
    $
    10,623
    
    
    $
    9,249
    
    
    $
    37
    
    
    $
    29,912Basic earnings per
common share
    
    
    0.56
    
    
    
    0.61
    
    
    
    0.54
    
    
    
    0.00
    
    
    
    1.72
    (1)Diluted earnings
per common share
    
    
    0.54
    
    
    
    0.60
    
    
    
    0.52
    
    
    
    0.00
    
    
    
    1.68
    (1)
 (1)
   61




---



##### 



Item 9.Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure.
  Item 9A. Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures
  Managements Report on Internal Control Over Financial Reporting
   Attestation Report of the Registered Public Accounting Firm
  Changes in Internal Control Over Financial Reporting
  62




---



##### 



Report of Independent Registered Public Accounting Firm on
Internal Control over Financial Reporting
 Black Box Corporation
      63




---



##### 



64




---



##### 



Item 9B. Other Information.
  
 PART III
 
 Item 10. Directors and Executive Officers of the Registrant.
   
 Item 11. Executive Compensation.
  
 Item 12. Security Ownership of Certain Beneficial Owners And Management And Related
Stockholder Matters.
  
 Item 13. Certain Relationships and Related Transactions.
  
 Item 14. Principal Accounting Fees and Services.
  65




---



##### 



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules.
       ExhibitNumber
    
    Description2.1
    
    Agreement and Plan of Merger, dated as of December 20, 2004, by and among the
Company, SF Acquisition Co. and Norstan, Inc. (1)2.2
    
    Tender and Voting Agreement, dated as of December 20, 2004, by and among the
Company, SF Acquisition Co. and Norstan, Inc. (1)2.3
    
    Stock Option Agreement, dated as of December 20, 2004, by and among the Company, SF
Acquisition Co. and Norstan, Inc. (1)2.4
    
    Interest Purchase Agreement by and
between Platinum Equity, LLC and the Company dated as of April 10, 2006 (2)2.5
    
    Amendment to the Interest Purchase Agreement by and between Platinum Equity, LLC and
the Company dated as of April 30, 2006 (3)3(i)
    
    Second Restated Certificate of Incorporation of the Company, as amended
(4)3(ii)
    
    Amended and Restated By-laws of the
Company, as amended (5)10.1
    
    Amended and Restated Credit Agreement, dated as of June 30, 2004, by and among Black
Box Corporation of Pennsylvania, as Borrower, the Company, the Guarantors parties thereto, the
Lenders parties thereto and
Citizens Bank of Pennsylvania (6)10.2
    
    Guaranty and Suretyship Agreement, dated as of June 30, 2004, by and among the Company,
the Lenders and Citizens Bank of Pennsylvania (6)10.3
    
    Guaranty and Suretyship Agreement, dated as of June 30, 2004, by and among the
Guarantors, the Lenders and Citizens Bank of Pennsylvania (6)10.4
    
    Second Amended and Restated Credit Agreement, dated as of January 24, 2005, by and among
Black Box Corporation of Pennsylvania and SF Acquisition Co., as
Borrowers, the Company, the Guarantors
parties thereto, the Lenders parties thereto and Citizens Bank of Pennsylvania
(7)
 66




---



##### 



10.5
    
    Guaranty and Suretyship Agreement,
dated as of January 24, 2005, by and among the Company, the
Lenders and Citizens Bank of Pennsylvania (8)10.6
    
    Guaranty and Suretyship Agreement,
dated as of January 24, 2005, by and among the Guarantors, the
Lenders and Citizens Bank of Pennsylvania (8)10.7
    
    First Amendment to the Second Amended and Restated Credit Agreement, dated as of February
17, 2005, by and among Black Box Corporation of Pennsylvania and Norstan, Inc., as
Borrowers, the Company, the Guarantors parties thereto, the Lenders parties thereto and Citizens Bank of
Pennsylvania (9)10.8
    
    Second Amendment to the Second Amended and Restated Credit Agreement dated as of March
28, 2006 by and among Black Box Corporation of Pennsylvania and
Norstan, Inc., as Borrowers, the Company, the Guarantors parties
thereto, the Lenders parties thereto and Citizens Bank of Pennsylvania (3)10.9
    
    Agreement between the Company and
Fred C. Young
(5)10.10
    
    Agreement between the Company and
Roger E. M. Croft
(10)10.11
    
    Agreement between the Company and
Francis W. Wertheimber
(10)10.12
    
    1992 Stock Option Plan, as amended
through August 9, 2005
(11)10.13
    
    1992 Director Stock Option Plan, as
amended through March 15, 2005
(12)10.14
    
    Form of Black Box Corporation Non-Qualified Stock Option Agreement (pursuant to the
1992 Director Stock Option Plan; form of agreement in effect prior to August 10, 2004)
(10)10.15
    
    Form of Black Box Corporation Non-Qualified Stock Option Agreement (pursuant to the
1992 Director Stock Option Plan; form of agreement in effect as of August 10, 2004)
(10)10.16
    
    Form of Black Box Corporation Non-Qualified Stock Option Agreement (pursuant to the
1992 Director Stock Option Plan; form of agreement in effect as of October 31, 2005)
(11)10.17
    
    Form of Black Box Corporation Non-Qualified Stock Option Agreement (pursuant to the
1992 Stock Option Plan)
(10)10.18
    
    Form of Black Box Corporation Non-Qualified Stock Option Agreement (pursuant to the
1992 Stock Option Plan; form of agreement in effect as of
October 31, 2005)
(11)10.19
    
    Description of Executive Incentive Bonus Plan for Fiscal 2006
(11)10.20
    
    Summary of Director Compensation
(13)21.1
    
    Subsidiaries of the Registrant
(13)23.1
    
    Consent of Independent Registered
Public Accounting Firm
(13)23.2
    
    Consent of Independent Registered
Public Accounting Firm
(13)31.1
    
    Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities
and Exchange Act of 1934, as amended, and Section 302 of the Sarbanes-Oxley Act of 2002
(13)31.2
    
    Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities
and Exchange Act of 1934, as amended, and Section 302 of the Sarbanes-Oxley Act of 2002
(13)
 67




---



##### 



32.1
    
    Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule
13a-14(b) of the Securities and Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (14)
 (1)
    
    Filed as an exhibit to the Current Report on Form 8-K of the Company, file number
0-18706, filed with the SEC on December 23, 2004, and incorporated herein by reference.(2)
    
    Filed as Exhibit 2.1 to the Current Report on Form 8-K of the Company, file
number 0-18706, filed with the SEC on April 13, 2006, and incorporated herein by reference.(3)
    
    Filed as an exhibit to the Current Report on Form 8-K of the Company, file number
0-18706, filed with the SEC on May 4, 2006, and incorporated herein by reference.(4)
    
    Filed as Exhibit 3(i) to the Quarterly Report on Form 10-Q of the Company, file
number 0-18706, filed with the SEC on November 14, 2000, and incorporated herein by
reference.(5)
    
    Filed as an exhibit to the Annual Report on Form 10-K of the Company, file
number 0-18706, filed with the SEC on June 14, 2004, and incorporated herein by reference.(6)
    
    Filed as an exhibit to the Quarterly Report on Form 10-Q of the Company, file
number 0-18706, filed with the SEC on August 12, 2004, and incorporated herein by reference.(7)
    
    Filed as Exhibit (b)(2) to Amendment No. 4 to the Schedule TO filed by the
Company and SF Acquisition Co. on January 26, 2005, and incorporated herein by reference.(8)
    
    Filed as an exhibit to the Quarterly Report on Form 10-Q of the Company, file
number 0-18706, filed with the SEC on February 10, 2005, and incorporated herein by
reference.(9)
    
    Filed as Exhibit 10.1 to the Current Report on Form 8-K of the Company, file
number 0-18706, filed with the SEC on February 23, 2005, and incorporated herein by
reference.(10)
    
    Filed as an exhibit to the Quarterly Report on Form 10-Q of the Company, file
number 0-18706, filed with the SEC on November 12, 2004, and incorporated herein by
reference.(11)
    
    Filed as an exhibit to the Quarterly Report on Form 10-Q of the Company, file
number 0-18706, filed with the SEC on November 10, 2005, and incorporated herein by
reference.(12)
    
    Filed as Exhibit 10.2 to the Current Report on Form 8-K of the Company, file
number 0-18706, filed with the SEC on March 18, 2005, and incorporated herein by reference.(13)
    
    Filed herewith.
   68




---



##### 



SIGNATURES
  BLACK BOX CORPORATIONDated: June 14, 2006/s/ Michael McAndrewMichael McAndrew, Vice President,
Chief Financial Officer, Treasurer,
Secretary and Principal Accounting
Officer
  Signatures
    
    Capacity
    
    Date/s/ WILLIAM F. ANDREWS
    
    Director
    
    June 14, 2006William F. Andrews/s/ RICHARD L. CROUCH
    
    Director
    
    June 14, 2006Richard L. Crouch/s/ THOMAS W. GOLONSKI
    
    Director
    
    June 14, 2006Thomas W. Golonski/s/ THOMAS G. GREIG
    
    Director and Chairman
    
    June 14, 2006Thomas G. Greig
    
    of the Board/s/ EDWARD A. NICHOLSON
    
    Director
    
    June 14, 2006Edward A. Nicholson/s/ FRED C. YOUNG
    
    Director and
    
    June 14, 2006Fred C. Young
    
    Chief Executive Officer/s/ MICHAEL MCANDREW
    
    Vice President,
    
    June 14, 2006Michael McAndrew
    
    Chief Financial Officer,
Secretary, Treasurer and
Principal Accounting Officer
 69




---



##### 



BLACK BOX CORPORATION
 Valuation and Qualifying Accounts
 Additions
    
    AdditionsBalance at
    
    Charged to
    
    Resulting
    
    Reductions
    
    BalanceBeginning of
    
    Costs and
    
    from
    
    from
    
    at End ofDescription
    
    Period
    
    Expenses
    
    Acquisitions
    
    Reserves
    
    PeriodYear Ended March 31, 2006Inventory reserves
    
    $
    12,546
    
    
    $
    4,136
    
    
    $
    43
    
    
    ($
    2,438
    )
    
    $
    14,287Allowance for unrealizable
accounts/sales returns
    
    
    7,342
    
    
    
    9,182
    
    
    
    49
    
    
    (
    7,056
    )
    
    
    9,517Restructuring reserve
    
    
    16,598
    
    
    
    5,290
    
    
    
    364
    
    
    (
    11,554
    )
    
    
    10,698Year Ended March 31, 2005Inventory reserves
    
    $
    4,840
    
    
    $
    2,106
    
    
    $
    9,335
    
    
    ($
    3,735
    )
    
    $
    12,546Allowance for unrealizable
accounts/sales returns
    
    
    10,426
    
    
    
    7,097
    
    
    
    1,042
    
    
    (
    11,223
    )
    
    
    7,342Restructuring reserve
    
    
    593
    
    
    
    3,019
    
    
    
    14,761
    
    
    (
    1,775
    )
    
    
    16,598Year Ended March 31, 2004Inventory reserves
    
    $
    3,981
    
    
    $
    3,697
    
    
    $
    --
    
    
    ($
    2,838
    )
    
    $
    4,840Allowance for unrealizable
accounts/sales returns
    
    
    11,710
    
    
    
    2,502
    
    
    
    --
    
    
    (
    3,786
    )
    
    
    10,426Restructuring reserve
    
    
    6,181
    
    
    
    --
    
    
    
    --
    
    
    (
    5,588
    )
    
    
    593
 70