The Company
Black Box is a leading dedicated network infrastructure services provider. Black Box offers one-source network infrastructure services for communications systems. The Company’s services offerings include design, installation, integration, monitoring and maintenance of voice, data and integrated communications systems. The Company’s primary services offering is voice solutions (“Voice Services”); the Company also offers premise cabling and other data-related services (“Data Services”) and products. The Company provides 24/7/365 technical support for all of its solutions which encompass all major voice and data product manufacturers as well as 118,000 network infrastructure products (“Hotline products”) that it sells through its catalog and Internet Web site (such catalog and Internet Web site business, together with technical support for such business, being referred to as “Hotline Services”) and its Voice Services and Data Services (collectively referred to as “On-Site services”) offices. As of June 30, 2010, the Company had more than 3,000 professional technical experts in 194 offices serving more than 175,000 clients in 141 countries throughout the world. Founded in 1976, Black Box, a Delaware corporation, operates subsidiaries on five continents and is headquartered near Pittsburgh in Lawrence, Pennsylvania.

With respect to Voice Services, the Company’s revenues are primarily generated from the sale and/or installation of new voice communication systems, the maintenance of voice communication systems and moves, adds and changes (“MAC work”) as customers’ employees change locations or as customers move or remodel their physical space. The Company’s diverse portfolio of product offerings allows it to service the needs of its customers which it believes is a unique competitive advantage. With respect to the sale of new voice communication systems, most significant orders are subject to competitive bidding processes and, generally, competition can be significant for such new orders. The Company is continually bidding on new projects to replace projects that are completed. New voice communication system orders often generate a maintenance agreement to maintain the voice communication system which generally ranges from 1-3 years for commercial clients and 3-5 years for government clients. Sales of new voice communication systems and, to a lesser extent, MAC work, is dependent upon general economic growth and the Company’s customers’ capital spending. On the other hand, revenues from maintenance contracts generally are not dependent on the economy as customers seek to extend the life of their existing equipment and delay capital spending on new voice communication systems. The Company also has government contracts which generate significant revenues and are not as dependent on the overall economic environment as commercial customers. Maintenance and MAC work revenues also are dependent upon the Company’s history and relationship with its customers and its long track record of providing high-quality service.

Similarly, the Company’s revenues for Data Services are generated from the installation or upgrade of data networks and MAC work. The installation of new data networks is largely dependent upon commercial employment and building occupancy rates. Installed data networks, however, may need to be upgraded in order to provide for larger, faster networks to accommodate the growing use of network technology. Additionally, Data Services projects can include MAC work, similar to Voice Services projects, which is dependent on economic factors that are the same as those factors discussed above in relation to the Voice Services business.

There is and has been a trend toward convergence of voice and data networks. Since the Company has technical expertise in both of these areas, the Company believes that this is a competitive advantage. Both the Voice Services and Data Services businesses generate backlog. At June 30, 2010, the Company’s backlog, defined as expected revenue related to executed client purchase orders or contracts that are estimated to be complete within 180 days, was approximately $229,000 and relates primarily to Voice Services and Data Services.

The Company generates Hotline Services revenues from the sale of more than 118,000 products through its catalog, Internet Web site and the Company’s On-Site services offices. The sale of these products is a highly fragmented and competitive business. The Company has been in this business for over 30 years and has developed a reputation for providing high quality products, free 24/7/365 technical support, comprehensive warranties and rapid order fulfillment. With an average order size of less than one thousand dollars, the Company’s Hotline Services is less impacted by capital spending and more so on general IT spending. The Company’s Hotline Services business provides additional distribution and support capabilities along with access to Black Box branded products to both the Data Services and Voice Services businesses which provides cost benefits.

The Company services a variety of customers within most major industries, with the highest concentration in government, business services, technology, retail, healthcare and manufacturing. Factors that impact those verticals, therefore, could have an impact on the Company. While the Company generates most of its revenues in North America, the Company also generates revenues from around the world, primarily Europe, so that factors that impact the European market could impact the Company.

Company management (“Management”) strives to develop extensive and long-term relationships with high-quality customers as Management believes that satisfied customers will demand quality services and product offerings even in economic downturns.

Management is presented with and reviews revenues and operating income by geographical segment. In addition, revenues and gross profit information by service type are provided herein for purposes of further analysis.

The Company has completed several acquisitions from April 1, 2009 through June 30, 2010 that have had an impact on the Company’s consolidated financial statements and, more specifically, North America Voice Services for the periods under review. Fiscal 2010 acquisitions were (i) Quanta Systems, LLC (“Quanta”) and (ii) CBS Technologies Corp. (“CBS”). The acquisitions noted above are collectively referred to as the “Acquired Companies.” The results of operations of the Acquired Companies are included within the Company’s Consolidated Statements of Income beginning on their respective acquisition dates.

The Company incurs certain expenses (i.e., expenses incurred as a result of certain acquisitions) that it excludes when evaluating the continuing operations of the Company. The following table is included to provide a schedule of these current expenses and an estimate of these future expenses for Fiscal 2011 (by quarter) based on information available to the Company as of June 30, 2010:

The following table is included to provide a schedule of these expenses during Fiscal 2010 (by quarter):

The following table provides information on Revenues and Operating income by reportable geographic segment (North America, Europe and All Other). The table below should be read in conjunction with the following discussions.

The following table provides information on Revenues and Gross profit by service type (Data Services, Voice Services and Hotline Services). The table below should be read in conjunction with the following discussions.

Total Revenues
Total revenues for 1Q11 were $263,596, an increase of 12% compared to total revenues for 1Q10 of $235,212. The Acquired Companies contributed incremental revenue of $8,012 and $0 for 1Q11 and 1Q10, respectively. Excluding the effects of the acquisitions and the positive exchange rate impact of $151 in 1Q11 relative to the U.S. dollar, total revenues would have increased 9% from $235,212 to $255,433 for the reasons discussed below. There were a total of 66 selling days in 1Q11 compared to 62 selling days in 1Q10 which represents a 6% increase in the number of selling days in 1Q11 over 1Q10.

North America
Revenues in North America for 1Q11 were $230,484, an increase of 13% compared to revenues for 1Q10 of $204,583. The Acquired Companies contributed incremental revenue of $8,012 and $0 for 1Q11 and 1Q10, respectively. Excluding the effects of the acquisitions and the positive exchange rate impact of $681 in 1Q11 relative to the U.S. dollar, North American revenues would have increased 8% from $204,583 to $221,791. The Company believes that this increase is primarily due to a four (4) selling day increase over the prior year, increased activity for both end-user and indirect sales of its Voice Services within the government (primarily federal), retail and business services revenue verticals, increased activity for both end-user and indirect sales of its Data Services within the business services revenue vertical and a general increase in activity for its Hotline Services, partially offset by a decrease related to a nonrecurring Data Services project completed during Fiscal 2010.

Europe
Revenues in Europe for 1Q11 were $24,942, an increase of 4% compared to revenues for 1Q10 of $23,886. Excluding the negative exchange rate impact of $954 in 1Q11 relative to the U.S. dollar, Europe revenues would have increased 8% from $23,886 to $25,896. The Company believes that this increase is primarily due to a four (4) selling day increase over the prior year and increased activity for indirect sales of its Hotline Services within the government revenue vertical, partially offset by continuing weak general economic conditions that affected client demand for its Data Services.

All Other
Revenues for All Other for 1Q11 were $8,170, an increase of 21% compared to revenues for 1Q10 of $6,743. Excluding the positive exchange rate impact of $424 in 1Q11 relative to the U.S. dollar, All Other revenues would have increased 15% from $6,743 to $7,746.

Data Services
Revenues from Data Services for 1Q11 were $53,957, an increase of 5% compared to revenues for 1Q10 of $51,410. Excluding the positive exchange rate impact of $357 in 1Q11 relative to the U.S. dollar for its international Data Services, Data Services revenues would have increased 4% from $51,410 to $53,600. The Company believes that this increase is primarily due to a four (4) selling day increase over the prior year and increased activity for both end-user and indirect sales in North America within the business services revenue vertical, partially offset by a decrease related to a nonrecurring project in North America completed during Fiscal 2010 and continuing weak general economic conditions that affected client demand for these services in Europe.

Voice Services
Revenues from Voice Services for 1Q11 were $163,590, an increase of 16% compared to revenues for 1Q10 of $141,520. The Acquired Companies contributed incremental revenue of $8,012 and $0 for 1Q11 and 1Q10, respectively. Excluding the effects of the acquisitions, Voice Services revenues would have increased 10% from $141,520 to $155,578. The Company believes that this increase is primarily due to a four (4) selling day increase over the prior year and increased activity for both end-user and indirect sales within the government (primarily federal), retail and business services revenue verticals. There was no exchange rate impact on Voice Services revenues as all of the Company’s Voice Services revenues are denominated in U.S. dollars.

Hotline Services
Revenues from Hotline Services for 1Q11 were $46,049, an increase of 9% compared to revenues for 1Q10 of $42,282. Excluding the negative exchange rate impact of $206 in 1Q11 relative to the U.S. dollar for its international Hotline Services, Hotline Services revenues would have increased 9% from $42,282 to $46,255. The Company believes that this increase is primarily due to a four (4) selling day increase over the prior year, increased activity for indirect sales in Europe within the government revenue vertical and a general increase in activity in North America.

Gross profit dollars for 1Q11 were $89,614, an increase of 9% compared to gross profit dollars for 1Q10 of $82,413. Gross profit as a percent of revenues for 1Q11 was 34.0%, a decrease of 1.0% compared to gross profit as a percentage of revenues for 1Q10 of 35.0%. The Company believes the percent decrease was due primarily to an increase in project-related work, which carries a lower margin than MAC work and maintenance work, in its Voice Services, lower margin projects primarily due to continued pricing pressures for its Data Services and product and client mix for its Hotline Services. The dollar increase is primarily due to the increase in revenues partially offset by the decrease in gross profit as a percentage of revenues.

Gross profit dollars for Data Services for 1Q11 were $14,350, or 26.6% of revenues, compared to gross profit dollars for 1Q10 of $13,947, or 27.1% of revenues. Gross profit dollars for Voice Services for 1Q11 were $54,033, or 33.0% of revenues, compared to gross profit dollars for 1Q10 of $48,379, or 34.2% of revenues. Gross profit dollars for Hotline Services for 1Q11 were $21,231, or 46.1% of revenues, compared to gross profit dollars for 1Q10 of $20,087, or 47.5% of revenues. Please see the preceding paragraph for the analysis of gross profit variances by segment.

Selling, general & administrative expenses
Selling, general & administrative expenses for 1Q11 were $63,620, nearly equivalent to Selling, general & administrative expenses for 1Q10 of $63,883. Selling, general & administrative expenses as a percent of revenues for 1Q11 were 24.1% compared to 27.2% for 1Q10. The decrease in Selling, general & administrative expenses as a percent of revenue over the prior year was primarily due to increased revenues and the Company’s efforts during Fiscal 2010 to right-size the organization and more properly align the expense structure with anticipated revenues and changing market demand for its solutions and services.

Intangibles amortization
Intangibles amortization for 1Q11 was $3,102, a decrease of $943 compared to Intangibles amortization for 1Q10 of $4,045. The decrease was primarily attributable to the amortization run-out for certain intangible assets partially offset by addition of intangible assets from acquisitions completed subsequent to the first quarter of Fiscal 2010.

Operating income
As a result of the foregoing, Operating income for 1Q11 was $22,892, or 8.7% of revenues, an increase of $8,407 compared to Operating income for 1Q10 of $14,485, or 6.2% of revenues.

Interest expense (income), net
Net interest expense for 1Q11 was $1,690, or 0.6% of revenues, compared to net interest expense for 1Q10 of $2,144, or 0.9% of revenues. The Company’s interest-rate swaps contributed gains of $532 and $203 for 1Q11 and 1Q10, respectively, due to the change in fair value. Excluding the effect of the interest-rate swaps, net interest expense would have decreased $125 from $2,347, or 1.0% of revenues, to $2,222, or 0.8% of revenues. This decrease in net interest expense is due to decreases in the weighted-average interest rate from 1.6% for 1Q10 to 1.3% for 1Q11 and in the weighted-average outstanding debt from $255,027 for 1Q10 to $219,773 for 1Q11. The decrease in the weighted-average interest rate is due primarily to the overall decline in short-term interest rates.

Provision for income taxes
The tax provision for 1Q11 was $8,057, an effective tax rate of 38.0%. This compares to the tax provision for 1Q10 of $4,681, an effective tax rate of 37.5%. The tax rate for 1Q11 was higher than 1Q10 due to changes in the overall mix of taxable income among worldwide offices and additional uncertain income tax positions (including interest and penalties). The Company anticipates that its deferred tax asset is realizable in the foreseeable future.

Net income
As a result of the foregoing, Net income for 1Q11 was $13,144, or 5.0% of revenues, compared to Net income for 1Q10 of $7,802, or 3.3% of revenues.

Net cash provided by operating activities during 1Q11 was $1,248. Significant factors contributing to the source of cash were: net income of $13,144 inclusive of non-cash charges of $4,686 and $3,002 for amortization / depreciation expense and stock compensation expense, respectively, as well as increases in trade accounts payable of $11,890 and billings in excess of costs of $4,372. Significant factors contributing to a use of cash include increases in trade accounts receivable, net inventory and costs in excess of billings of $6,774, $2,103 and $14,111, respectively, primarily due to increased business activity during 1Q11 as well as decreases in accrued compensation and benefits of $9,289 (primarily due to the payment of Fiscal 2010 year-end bonuses and incentive compensation during 1Q11), other liabilities of $3,071 and restructuring reserves of $1,618. Changes in the above accounts are based on average Fiscal 2011 exchange rates.

Net cash provided by operating activities during 1Q10 was $16,087. Significant factors contributing to the source of cash were: net income of $7,802 inclusive of non-cash charges of $6,078 and $1,643 for amortization / depreciation expense and stock compensation expense, respectively, as well as decreases in net inventory of $2,555 and net trade accounts receivable of $11,690 and an increase in accrued taxes of $2,442. Significant factors contributing to a use of cash include decreases in billings in excess of costs, restructuring reserves, accrued compensation and benefits and deferred revenue of $2,488, $3,041, $5,688 and $1,290, respectively, and an increase in costs in excess of billings of $4,464. Changes in the above accounts are based on average Fiscal 2010 exchange rates.

As of June 30, 2010 and 2009, the Company had cash and cash equivalents of $16,955 and $25,774, respectively, working capital of $139,783 and $136,276, respectively, and a current ratio of 1.7 and 1.7, respectively.

The Company believes that its cash provided by operating activities and availability under its credit facility will be sufficient to fund the Company’s working capital requirements, capital expenditures, dividend program, potential stock repurchases, potential future acquisitions or strategic investments and other cash needs for the next 12 months.

Net cash used by investing activities during 1Q11 was $2,579. Significant factors contributing to the cash outflow were: $1,683 for holdbacks and contingent fee payments related to prior period acquisitions and $940 for gross capital expenditures.

Net cash used by investing activities during 1Q10 was $1,454. Significant factors contributing to the cash outflow were: $916 for holdbacks and contingent fee payments related to prior period acquisitions and $567 for gross capital expenditures.

Net cash used by financing activities during 1Q11 was $2,359. Significant factors contributing to the cash outflow were $1,053 for the payment of dividends and $902 of net payments on long-term debt.

Net cash used by financing activities during 1Q10 was $13,100. Significant factors contributing to the cash outflow were $12,048 of net payments on long-term debt and $1,052 for the payment of dividends.

Revolving Credit Agreement – On January 30, 2008, the Company entered into a Third Amended and Restated Credit Agreement dated as of January 30, 2008 (the “Credit Agreement”) with Citizens Bank of Pennsylvania, as agent, and a group of lenders. The Credit Agreement expires on January 30, 2013. Borrowings under the Credit Agreement are permitted up to a maximum amount of $350,000, which includes up to $20,000 of swing-line loans and $25,000 of letters of credit. The Credit Agreement may be increased by the Company up to an additional $100,000 with the approval of the lenders and may be unilaterally and permanently reduced by the Company to not less than the then outstanding amount of all borrowings. Interest on outstanding indebtedness under the Credit Agreement accrues, at the Company’s option, at a rate based on either: (a) the greater of (i) the prime rate per annum of the agent then in effect and (ii) 0.50% plus the rate per annum announced by the Federal Reserve Bank of New York as being the weighted-average of the rates on overnight Federal funds transactions arranged by Federal funds brokers on the previous trading day or (b) a rate per annum equal to the LIBOR rate plus 0.50% to 1.125% (determined by a leverage ratio based on the Company’s consolidated Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”)). The Credit Agreement requires the Company to maintain compliance with certain non-financial and financial covenants such as leverage and fixed-charge coverage ratios. As of June 30, 2010, the Company was in compliance with all financial covenants under the Credit Agreement.

As of June 30, 2010, the Company had total debt outstanding of $210,091. Total debt was comprised of $209,235 outstanding under the Credit Agreement, $1,751 of obligations under capital leases and $2 of various other third-party, non-employee loans. The maximum amount of debt outstanding under the Credit Agreement, the weighted-average balance outstanding under the Credit Agreement and the weighted-average interest rate on all outstanding debt for the three (3) months ended June 30, 2010 was $233,660, $219,773 and 1.3%, respectively, compared to $261,750, $255,027 and 1.6%, respectively, for the three (3) months ended June 30, 2009.

As of June 30, 2010, the Company had $4,636 outstanding in letters of credit and $136,129 in unused commitments under the Credit Agreement.

Fiscal 2011
1Q11 - The Company’s Board of Directors (the “Board”) declared a cash dividend of $0.06 per share on all outstanding shares of the common stock. The dividend totaled $1,056 and was paid on July 19, 2010 to stockholders of record at the close of business on July 2, 2010.

Fiscal 2010
1Q10 - The Board declared a cash dividend of $0.06 per share on all outstanding shares of the common stock. The dividend totaled $1,052 and was paid on July 10, 2009 to stockholders of record at the close of business on June 26, 2009.

While the Company expects to continue to declare quarterly dividends, the payment of future dividends is at the discretion of the Board and the timing and amount of any future dividends will depend upon earnings, cash requirements and financial condition of the Company. Under the Credit Agreement, the Company is permitted to make any distribution or dividend as long as no Event of Default or Potential Default (each as defined in the Credit Agreement) occurs or is continuing.

Fiscal 2011
There were no purchases of common stock during the three month period ended June 30, 2010. During such period, the Company made tax payments of $482 and withheld 16,488 shares of common stock, which were designated as treasury shares, for an average price per share of $29.26, related to share withholding to satisfy income taxes due as a result of the vesting in May 2010 of certain restricted stock units.

Fiscal 2010
There were no purchases of common stock during Fiscal 2010.

Since the inception of the repurchase program in April 1999 through June 30, 2010, the Company has repurchased 7,626,195 shares of common stock for an aggregate purchase price of $323,095, or an average purchase price per share of $42.37. These shares do not include the treasury shares withheld for tax payments resulting from the vesting in May 2010 of certain restricted stock units. As of June 30, 2010, 873,805 shares were available under repurchase programs approved by the Board. Additional repurchases of common stock may occur from time to time depending upon factors such as the Company’s cash flows and general market conditions. While the Company expects to continue to repurchase shares of common stock for the foreseeable future, there can be no assurance as to the timing or amount of such repurchases. Under the Credit Agreement, the Company is permitted to repurchase its common stock as long as no Event of Default or Potential Default (each as defined in the Credit Agreement) occurs or is continuing, the leverage ratio (after taking into consideration the payment made to repurchase such common stock) would not exceed 2.75 to 1.0 and the availability to borrow under the Credit Facility would not be less than $20,000.

Legal Proceedings
See the matter discussed in Note 15 of the Notes to the Consolidated Financial Statements of this Quarterly Report on Form 10-Q (this “Form 10-Q”), which information is incorporated herein by reference.

Inflation
The overall effects of inflation on the Company have been nominal. Although long-term inflation rates are difficult to predict, the Company continues to strive to minimize the effect of inflation through improved productivity and cost reduction programs as well as price adjustments within the constraints of market competition.

Valuation of Goodwill
Since September 26, 2009 (the date of the Company’s most recent annual goodwill impairment assessment), the Company’s stock market capitalization has been lower than its net book value. However, each of the Company’s reporting units continues to operate profitably and generate significant cash flow from operations, and the Company expects that each will continue to do so throughout the remainder of Fiscal 2011 and beyond. In addition, the Company believes that a reasonable potential buyer would offer a control premium for the business that would adequately cover the difference between the recent stock trading prices and the book value.

Critical Accounting Policies
The Company’s critical accounting policies require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and are the most important to the portrayal of the Company’s consolidated financial statements. The Company’s critical accounting policies are disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Form 10-K. There have been no changes to the Company’s critical accounting policies during the three (3) months ended June 30, 2010.

Impact of Recently Issued Accounting Pronouncements
See Note 2 of the Notes to the Consolidated Financial Statements for further discussion of recently-issued accounting standards and the related impact on the Company’s consolidated financial statements.

Cautionary Forward Looking Statements
When included in this Form 10-Q or in documents incorporated herein by reference, the words “should,” “expects,” “intends,” “anticipates,” “believes,” “estimates,” “approximates,” “targets,” “plans” and analogous expressions are intended to identify forward-looking statements. One can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. Although it is not possible to predict or identify all risk factors, such risks and uncertainties may include, among others, levels of business activity and operating expenses, expenses relating to corporate compliance requirements, cash flows, global economic and business conditions, successful integration of acquisitions, the timing and costs of restructuring programs, successful marketing of DVH services, successful implementation of the Company’s M&A program, including identifying appropriate targets, consummating transactions and successfully integrating the businesses, successful implementation of the Company’s government contracting programs, competition, changes in foreign, political and economic conditions, fluctuating foreign currencies compared to the U.S. dollar, rapid changes in technologies, client preferences, the Company’s arrangements with suppliers of voice equipment and technology and various other matters, many of which are beyond the Company’s control. Additional risk factors are included in the Form 10-K. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and speak only as of the date of this Form 10-Q. The Company expressly disclaims any obligation or undertaking to release publicly any updates or any changes in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

The Company is exposed to market risks in the ordinary course of business that include interest-rate volatility and foreign currency exchange rates volatility. Market risk is measured as the potential negative impact on earnings, cash flows or fair values resulting from a hypothetical change in interest rates or foreign currency exchange rates over the next year. The Company does not hold or issue any other financial derivative instruments (other than those specifically noted below) nor does it engage in speculative trading of financial derivatives.

The Company’s primary interest-rate risk relates to its long-term debt obligations. As of June 30, 2010, the Company had total long-term obligations of $209,235 under the Credit Agreement. Of the outstanding debt, $150,000 was in variable rate debt that was effectively converted to a fixed rate through multiple interest-rate swap agreements (discussed in more detail below) and $59,235 was in variable rate obligations. As of June 30, 2010, an instantaneous 100 basis point increase in the interest rate of the variable rate debt would reduce the Company’s net income in the subsequent fiscal quarter by $146 ($91 net of tax) assuming the Company employed no intervention strategies.

To mitigate the risk of interest-rate fluctuations associated with the Company’s variable rate long-term debt, the Company has implemented an interest-rate risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings caused by interest-rate volatility. The Company’s goal is to manage interest-rate sensitivity by modifying the re-pricing characteristics of certain balance sheet liabilities so that the net-interest margin is not, on a material basis, adversely affected by the movements in interest rates.

On July 26, 2006, the Company entered into a five-year floating-to-fixed interest-rate swap that is based on a 3-month LIBOR rate versus a 5.44% fixed rate, has a notional value of $100,000 (which reduced to $50,000 as of June 26, 2009) and does not qualify for hedge accounting. On June 15, 2009, the Company entered into a three-year floating-to-fixed interest-rate swap that is based on a 3-month LIBOR rate versus a 2.28% fixed rate, has a notional value of $100,000 reducing to $50,000 after two years and does not qualify for hedge accounting. Changes in the fair market value of the interest-rate swap are recorded as an asset or liability within the Company’s Consolidated Balance Sheets and Interest expense (income) within the Company’s Consolidated Statements of Income.

The Company has operations, clients and suppliers worldwide, thereby exposing the Company’s financial results to foreign currency fluctuations. In an effort to reduce this risk of foreign currency fluctuations, the Company generally sells and purchases inventory based on prices denominated in U.S. dollars. Intercompany sales to subsidiaries are generally denominated in the subsidiaries’ local currency. The Company has entered and will continue in the future, on a selective basis, to enter into foreign currency contracts to reduce the foreign currency exposure related to certain intercompany transactions, primarily trade receivables and loans. All of the foreign currency contracts have been designated and qualify as cash flow hedges. The effective portion of any changes in the fair value of the derivative instruments is recorded in Accumulated Other Comprehensive Income (“AOCI”) until the hedged forecasted transaction occurs or the recognized currency transaction affects earnings. Once the forecasted transaction occurs or the recognized currency transaction affects earnings, the effective portion of any related gains or losses on the cash flow hedge is reclassified from AOCI to the Company’s Consolidated Statements of Income. In the event it becomes probable that the hedged forecasted transaction will not occur, the ineffective portion of any gain or loss on the related cash flow hedge would be reclassified from AOCI to the Company’s Consolidated Statements of Income.

As of June 30, 2010, the Company had open foreign currency contracts in Australian and Canadian dollars, Danish krone, Euros, Mexican pesos, Norwegian kroner, British pounds sterling, Swedish krona, Swiss francs and Japanese yen. The open contracts have contract rates ranging from 1.12 to 1.23 Australian dollar, 1.01 to 1.07 Canadian dollar, 5.08 to 6.21 Danish krone, 0.68 to 0.83 Euro, 12.66 to 12.66 Mexican peso, 5.68 to 6.74 Norwegian kroner, 0.59 to 0.69 British pound sterling, 6.97 to 7.97 Swedish krona, 1.01 to 1.18 Swiss franc and 91.83 to 93.10 Japanese yen, all per U.S. dollar. The total open contracts had a notional amount of $98,223 and will expire within eleven (11) months.

Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

Management, including the Company’s Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) for the Company. Management assessed the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2010. Based upon this assessment, Management has concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2010 to provide reasonable assurance that information required to be disclosed by the Company in the reports filed or submitted by it under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to provide reasonable assurance that information required to be disclosed by the Company in such reports is accumulated and communicated to Management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

The SEC’s general guidance permits the exclusion of an assessment of the effectiveness of a registrant’s disclosure controls and procedures as they relate to its internal control over financial reporting for an acquired business during the first year following such acquisition if, among other circumstances and factors, there is not adequate time between the acquisition date and the date of assessment. As previously noted in this Form 10-Q, Black Box completed the acquisition of Quanta during Fiscal 2010. Quanta represents approximately 0.8% of the Company’s total assets as of June 30, 2010. Management’s assessment and conclusion on the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2010 excludes an assessment of the internal control over financial reporting of Quanta.

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of its inherent limitations, the Company’s internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.