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Operator
Before I turn the call over to Chuck, I have a few housekeeping items to review. Today we will discuss certain adjusted or non-GAAP financial measures which are described in more detail in this morning's earnings materials. Reconciliations of non-GAAP financial measures and other associated disclosures are contained in our earnings materials and posted on our website. All references during today's discussion will be to our adjusted results. All full year and quarterly growth rates described during today's presentation are on a year-over-year basis unless otherwise noted. I'll now turn the call over to our President and CEO, Chuck Treadway.
Chuck
Thank you, Mick, and good morning, everyone. I'll begin on slide two. 2022 was a solid year of execution against our CommScope Next plan that we shared with you in December 2021. That plan outlined a comprehensive set of actions to streamline our business and invest in profitable growth. Despite the many challenges throughout the year, substantial supply chain shortages, and high inflation across many of our input costs, I'm very proud of our strong execution across our team to deliver against our CommScope Next targets. Our ability to adapt to these challenges speaks to the success of our implemented general manager model and helped return core CommScope to a growth trajectory and restore margins to be more in line with historical levels. From a financial perspective, for the full year 2022, consolidated Comscope net sales of $9.23 billion increased 7 percent, and adjusted EBITDA of $1.28 billion increased 14 percent from the prior year. Core Comscope delivered net sales of $7.52 billion, increasing 12 percent from the prior year. the strong revenue and aggressive execution on our cost programs resulted in core adjusted EBITDA of $1.25 billion, an increase of 15% from the prior year. Importantly, we met the high end of our CommScope Next guideposts of $1.15 to $1.25 billion of core adjusted EBITDA. Additionally, we reduced our net leverage ratio to 6.9 times, nearly a full turn of improvement from where we began the year, and within the lower end of our targeted range. Shifting to the fourth quarter, consolidated net sales of $2.32 billion increased 4%, and adjusted EBITDA of $376 million increased 44% from the prior year. For core comp scope, fourth quarter net sales of $1.93 billion increased 10%, An adjusted EBITDA of $381 million increased 50% from the prior year. Core adjusted EBITDA margin for the quarter was a healthy 20%. And as expected, our second half EBITDA led to a meaningful improvement in our cash generation as we generated $364 million in free cash flow during the fourth quarter. Our record core adjusted EBITDA performance in the fourth quarter is a testament to our continued execution of our CommScope Next transformation initiatives across our core portfolio, including our efforts to recover inflationary pressures through pricing initiatives in the back half of the year. Specifically, we view the substantial growth contributed by our CCS and NICS segments as the foundation for CommScope's future. As expected, our book to build declined in the fourth quarter. However, we are in constant dialogue with our customers and expect this pause to last a couple of quarters as medium and long-term fundamentals remain strong. We believe the short-term adjustment will give way to strong long-term demand as the network and fiber build-out is in early innings. We feel the strength in our business continues to be evidenced in our backlog, which for the core business ended the year at over $2.9 billion. For additional context, over the last two years, our core backlog has grown 110%. Our book to bill over that time was 1.11. And in 2022, we delivered a full year book to bill of 1.0. Suffice to say, our business is in a significantly better position than we were two years ago. With this footing in mind, as we look to 2023, we are once again reaffirming our core adjusted EBITDA guideposts of $1.35 to $1.5 billion. As indicated in our third quarter call, our full year 2023 adjusted EBITDA range considers the potential for flat to low top line growth for the year. And regarding pacing throughout 2023, we expect to see a stronger second half than the first half. In addition, we expect typical seasonality project timing, and customer inventory adjustments to negatively impact our first quarter of the year. Before turning the call to Kyle, I'd like to talk about our business position to start the new year. As we've indicated throughout last year, we believe CCS has strong market tailwinds and that we are at the beginning of a multi-year build-out of fiber cable and connectivity. Over the past 18 months, we've aggressively invested in our internal capacity to enable CommScope to take full advantage of carrier footprint expansion driving fiber deeper. In addition, we are all well positioned to serve demand for billions of dollars in expected government subsidies to help close the digital divide. And our innovation engine is fully engaged to deploy the products that will enable all of this to come to fruition. Specifically, designed to reduce installation complexity save time, and train the labor force faster. We continue to design our connectivity and cabling portfolio with these themes in mind. And we believe our innovations are driving strategic wins in the market. And more recently, we've continued to demonstrate our innovation and technology leadership in the market with key participants in programs like the World Digital Opportunity Fund. All said, in the years to come, we view our continued technology innovations capacity investments, and customer demand will drive incremental opportunity for CCS growth. Turning to next, we eclipsed an important milestone in the third quarter of 2022, driving the business to significant improvement and anchoring on a trend of profitability that we expect to continue going forward. Again, evidenced in the $56 million of adjusted EBITDA delivered in the fourth quarter. While chip supply constraints remain, We continue to see signs of loosening in the market and expect gradual relief throughout 2023. Additionally, NICS ended the year with over $777 million in backlog, already representing over 80% of the revenue produced in 2022. We also continue to invest in services and recurring software as part of the segment's transformational growth initiatives. For the remaining core Comscope businesses, OWN and ANS, while their overall growth potentials may be more muted, our innovation engine isn't slowing down. In OWN, as we mentioned in the latter part of 2022, we fully contemplated a decline in the U.S. carrier capital spending into our overall core Comscope guideposts. And while this may present headwinds for 2023 revenue and EBITDA performance in the business, we expect some level of offset driven by share gains from our new technologies. This includes the mosaic antenna solution as well as opportunities to deliver lower power passive antennas in energy cost-conscious regions such as Europe. Finishing with ANS, we've discussed throughout 2022 the profitability headwinds the segment continues to face as a higher concentration of our product revenue shifts to the edge of networks. Our strong install base and leading technologies continue to position us as a market leader. Just another example of our leadership was highlighted recently in our press release, announcing a significant milestone of building and shipping more than 1 million amplifiers to top cable operators in 2022. With that, I will now turn the call over to Kyle to talk more about the year and the quarter.
Mick
Thank you, Chuck, and good morning, everyone. I'll start with an overview of our full year 2022 financial results on slide three. For the full year, consolidated Comscope reported net sales of $9.23 billion, an increase of 7% from the prior year. This performance was driven by growth in all core businesses, with the exception of A&S, and was also offset by a decline in homes. Growth in top line includes a headwind of approximately $150 million or 2% associated with the year-over-year change in FX rate. Excluding this impact, net sales grew over 9% organically. Consolidated adjusted EBITDA of $1.28 billion increased 14% from the prior year. Adjusted EBITDA growth for the full year occurred across all segments, with exception of ANS. Adjusted earnings per share of $1.66 increased by 19% from the prior year. As a result of our annual goodwill impairment testing, we reported a $1.12 billion impairment charge during the fourth quarter, which is excluded from the adjusted earnings per share calculation. For the full year, Core CommScope reported net sales of $7.52 billion, an increase of 12% from the prior year. Net sales growth was led by a significant year-over-year increase in CCS, followed by NICS and OWN, while partially offset by a decline in ANS. Core adjusted EBITDA for the full year was $1.25 billion, an increase of 15% from the prior year and at the high end of our expected range for the full year of 2022. Similar to net sales, core adjusted EBITDA growth was driven by increases in CCS, NICS, and OWN, while being partially offset by a decline in ANS. Turning to our fourth quarter results on slide four. For the fourth quarter, consolidated Comscope reported net sales of $2.32 billion, an increase of 4% from the prior year. Net sales growth was driven by our CCS, NICS, and ANS businesses, partially offset by declines in OWN and home. For the quarter, the year-over-year change in FX rate negatively impacted net sales by $44 million, or 2%. Excluding this impact, fourth quarter net sales grew 6% organically. Adjusted EBITDA of $376 million increased approximately 44% from the prior year, driven by the growth in CCS and NICS. Fourth quarter adjusted earnings per share of 49 cents increased by 58% from the prior year. Core CommScope net sales of $1.93 billion increased 10% from the prior year, driven by strength in CCS, NICS, and ANS. Core adjusted EBITDA of $381 million increased 50% from prior year, driven by the strong performance in CCS and NICS. As expected and indicated throughout the second half of 2022, we continue to work through our backlog to more manageable levels as supply chain conditions have begun to stabilize and our capacity enhancements have significantly reduced lead times. In addition to supply chain and lead time, as Chuck mentioned earlier, we saw a meaningful reduction in order input at the end of the third quarter and again during the fourth quarter, primarily related to customers adjusting inventory levels. We expect this to persist into the early parts of 2023. Our short-term visibility remains limited in certain products. Our optimism for strength in the second half of 2023 and beyond is driven by constant dialogue with our customer base. Fort Comscote ended the quarter with $2.9 billion in backlog, 110% above where it began in 2021. In our fastest-growing businesses, CCS and MIX, our combined ending backlog for the year was $2.1 billion, up 190% over the last two years. However, as expected, the slowdown in orders during the fourth quarter yielded a fourth quarter book-to-bill of 0.63 for core comp scope. As Chuck previously mentioned, these lower order rates have been incorporated into our expectation to deliver full year 2023 core adjusted EBITDA within the range of $1.35 to $1.5 billion. Looking to the first quarter, we expect sequential net sales and adjusted EBITDA to be down more than the typical seasonal decline in the core business. Despite the sequential decline, however, on a year-over-year basis, we would expect a significant improvement in core adjusted EBITDA performance. And similar to 2022, we would expect to see a strong improvement sequentially from the first half to the second half of 2023. Turning to our fourth quarter segment highlights on slide five. Starting with CCS, net sales of $957 million increased 19% from the prior year. Fourth quarter, growth in fiber once again drove the segment performance, increasing 40% across the entire fiber portfolio. And for the full year 2022, fiber products grew 41%. As indicated on our third quarter call, we saw weakness in our structured copper cable business on a year-over-year basis and sequential basis, mainly attributable to inventory builds within distributor channels and project delays. BCS adjusted EBITDA of $188 million grew 93% as the segment benefited from increased volume, price, and operational efficiencies. Looking forward into 2023, we expect the business to improve on a year-over-year basis driven by continued market growth and a full-year impact of the inflation-related pricing. Sequentially, in the first quarter, we expect CCS to be down given typical seasonality, in addition to continued inventory adjustments in the channel. However, as mentioned earlier, CCS customer conversations remain bullish on medium and long-term growth. Despite chip constraints, Nick's net sales of $289 million grew 20% from the prior year, driven by volume and price. NICS growth was once again led by ruckus, growing significantly year on year as well as sequentially, delivering another record quarter of revenue. And as Chuck mentioned, we are exiting the year with $777 billion of backlog in NICS. Although improving, semiconductor chip constraints will continue to impact the business in 2023. Nick suggested EBITDA of $56 million, increased by $50 million from the prior year. This strong performance is representative of the team's successful execution in the challenging chip supply environment, all the while continuing to invest in future product offerings. Additionally, the fourth quarter performance included one-time benefits to profitability that we do not expect to occur going forward. In addition to CHIP availability impacting EBITDA, we also expect to maintain a healthy level of investment in R&D. OWN net sales of $305 million declined 19% from the prior year. OWN adjusted EBITDA of $41 million declined 23% from prior year, primarily driven by the decline in volume. In addition to a $21 million bad debt charge related to one specific OWN customer. As previously indicated, we view the long-term opportunity for OWN as having low single-digit growth. That said, 2023 presents anticipated headwinds that will position OWN's top line to decline in the year. This is primarily driven by the expected reduction in North American operator capital expenditures. offset to some extent with new product innovations discussed throughout the last few quarters, such as our mosaic antenna solution. It's also important to highlight that this potential outcome has been previously contemplated in our full year 2023 core adjusted EBITDA guideposts. In our ANS business, net sales of $375 million increased 15% from the prior year, primarily driven by growth in access technologies. Adjusted EBITDA of $95 million declined approximately 2% from the prior year, driven by the negative mix impact of operator spend shifting to the edge discussed at length in previous calls. However, as expected, the fourth quarter performance represents better mix sequentially from the third quarter, given the timing of certain projects and software license purchases at the end of the quarter. For ANS, we would expect 2023 adjusted EBITDA margins to be in line with full year 2022 EBITDA margins, reflecting a higher concentration of lower margin edge products such as nodes, amplifiers, and taps. In addition, on a sequential basis, we would not expect the same impact of project timing and higher margin product mix to benefit the segment during the first quarter. Finishing up our segment highlights with home networks. Home net sales of $392 million declined 18% from the prior year and across both video and broadband businesses given weak demand. Adjusted EBITDA of negative $5 million declined $12 million from the prior year primarily driven by lower volume. While we expect home networks to be profitable for the full year 2023, performance improvements will be significantly weighted to the second half of the year. Home will likely remain challenged with profitability during the first quarter, given the expectation of weak demand and customer inventory adjustments. We maintain the belief in the strategic rationale to separate home from core comm scope, However, we continue to focus on implementing transformation initiatives to improve their current performance, which will take multiple quarters. Turning to slide six for an update on cash flow. As indicated on our prior call, the fourth quarter delivered a substantial improvement in our cash flow generation. Cash flow during the fourth quarter was driven by strong EBITDA and improving supply chain conditions that allowed us to moderate inventory growth. We generated approximately $387 million in cash from operations, free cash flow of $364 million, and adjusted free cash flow of $403 million during the fourth quarter. As a result, also indicated on prior earnings call, this significant cash generation drove our full year positive with cash from operations free cash flow, and adjusted free cash flow to $190 million, $89 million, and $198 million, respectively. Looking forward, while we expect to generate meaningful, improved free cash flow for the full year 2023, I'd remind you that the first quarter is historically a significant use of cash to start the year, specifically because it is our second highest interest-paying quarter and the timing of our annual incentive payouts. As we indicated during the fourth quarter, we would expect the midpoint of our EBITDA guidepost for 2023 to deliver four to $500 million of free cash flow for the year. This contemplates a more normalized conversion of EBITDA to cash. Turning to slide seven for an update on our liquidity and capital structure. During the fourth quarter, Strong cash generation notably improved our overall liquidity position. We ended the quarter with $398 million in global cash. Total cash and liquidity for the quarter was $1.31 billion, a 41% improvement from the prior quarter. As previously disclosed during our third quarter release, this cash position reflects a full repayment of the $105 million drawn on the ABL at the end of the prior quarter, which was made in late October. Other than the full ABL revolver repayment, we made no incremental debt repayments outside of our required $8 million of term loan amortization. The company ended the quarter with net leverage of 6.9 times, nearly a full term improvement from the prior quarter end and prior year end of 7.8 times. also within the lower end of our previous provided range of 6.8 times to 7.2 times for the full year 2022. I'll now turn it over to Chuck to provide some closing remarks and perspective on 2023. Thank you, Kyle.
Chuck
I'm now on slide eight. Throughout 2022, CompScope has demonstrated strong execution in an extremely dynamic environment and delivered on our previous commitments to grow our core profitability, reduce our net leverage ratio, and put us on the right path for enhanced shareholder value creation. The current economic environment that we operate in today is highly uncertain. However, based on conversations with our customers about 2023 and our backlog position, we are reaffirming our expectations to deliver full year 2023 core adjusted EBITDA in the range of 1.35 to $1.5 billion. The midpoint of this range assumes relatively flat year-on-year top-line growth. Despite the uncertain near-term economic environment, as Kyle and I have mentioned during our prepared remarks this morning, we believe that our significant backlog to start the year and CommScope Next initiatives provide a strong foundation for the company to continue to grow and create value. We've invested in driving organic growth including capacity expansions, restored our core margins in line with historical levels, implemented a general manager model to enhance our accountability and visibility, captured efficiencies throughout the organization, and continued to invest in growth and innovation to fuel our future. CTS and NICS are a testament to the progress we've made in 2022, given their combined 21% year-over-year net sales growth and combined adjusted EBITDA improvement of $262 million. I'd like to thank you for your interest in supporting ComScope and belief in our ability to continue to drive transformative change, which we believe will continue to unlock significant value for our shareholders. And with that, we'll now open the line for questions.
Kyle
Thank you. Ladies and gentlemen, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. And our first question coming from the line of Saliani with Bank of America. Your line is now open.
spk10
Hi. Good morning. I have two questions. First is, can you go over kind of your plans for debt reduction? You gave guidance about a year ago, and just speak about your plan and where are you on this plan. The second is, we know CapEx is slowing for service providers, which is the majority of your target market, and we are also seeing your comments about orders. What gives you the confidence that second half is going to be better than first half? Thanks.
Mick
Okay, I'll take the first question and Chuck can get the second one. You know, just as we start generating cash, you know, and, you know, dealing with our debt, I mean, we continue to be focused on deleverating. You know, I think as we said in our prepared remarks, you know, Q1 is a use of cash. as we think about the payment of our incentive plans and the higher interest quarter. I think as we move through the year, we'll finalize a tactical plan as we start moving into the second quarter. And we continue to be committed to using the cash to de-lever. We don't have necessarily a detailed plan now, but the intent is just to continue to de-lever as we generate the cash.
Chuck
I'll take your second question in our confidence to achieve the point, you know, the $135 to $15 billion and our strength, you know, saying the second half will be stronger than the first. I would start by saying, you know, confidence in the $135 to $15 is that we built in a low growth into our model. The second thing is we have, you know, $2.9 billion of backlog and significant progress with CommScope Next. We have initiatives that are already, you know, in place that will see the full run rate of those initiatives flowing through in 23, as well as new initiatives that are coming in in 23. And I'd close by just saying we have, you know, we're in constant conversations with our customers, and everyone seems to be bullish, medium, long term. They do have to get through this, you know, project delays and inventory adjustments, but everybody remains bullish longer term.
Mick
Yeah, the only thing that I would comment on that as well is when we think about our guidepost on EBITDA, the 135 to the 15 billion, you know, we, as Chuck mentioned, we have, you know, sort of flattish to very little growth built into that model. And in that model, we're assuming that our book-to-bill is going to be less than one for the year. Actually, to achieve sort of in the midpoint of that range, we could, you know, our book-to-bill could be 0.8, and we feel... comfortable that would still get us within the guideposts. Great. Thank you.
Kyle
Thank you. One moment please for our next question. And our next question coming from the line of Shannon Cross with Credit Suisse. Your line is now open.
spk01
Thank you very much for taking my question. Good to speak with you. I'm wondering, you know, relative to maybe a quarter or two ago, how are your thoughts progressing regarding all of the government funding that's coming? You know, as you talk to some of your partners, do you feel like the timing is still where you thought it would be, or maybe is it pushed out a little bit? And then I have a follow-up. Thank you.
Chuck
I would say the timing is still where we thought it would be. I would say that we're still in the early innings, but we're in – you know, a constant dialogue both at the state level and the federal level as bonds are starting to be allocated or already flowing. So we think that that's actually in pretty good shape.
spk01
Okay, great. And then just with regard to working capital, as you think about cash generation this year and maybe as you look forward, you know, is inventory still a significant generator of working capital? How are you thinking about it given the ongoing supply constraints and timing of that coming through?
Mick
Yeah, I think as we've mentioned in the past, you know, clearly the supply constraints, particularly on the chip side, you know, have resulted in higher inventory levels for us. You know, as we think about 2023, although we think it will be a little bit improved, we feel like the chip environment is still going to be challenged, and we don't really expect to see a lot of cash flow coming from a reduction in inventory. I think we're You know, we're not there yet based on what we're seeing from continued supply challenges in chips, although, as I said, better, still a little bit challenged.
spk01
Okay. Seems like you have a pretty conservative outlook to 23, given what you've done in 22.
Mick
I would comment on that. I mean, our model is our model.
spk01
Thank you.
Kyle
Thank you. One moment before our next question. And our next question coming from the lineup, Stephen Foss with Fox Advisors. Your line is now open.
Stephen Foss
Hi, good morning. I had two questions. First of all, Chuck, I know you mentioned with the guidance that there's a lot of projects underway that you get the full benefit of and then new initiatives. I'm just wondering how much further you think you could control your destiny in 2023 should, you know, sales maybe slightly disappoint sort of this slattish outlook. Given that you also have projects, I know that would help you in years beyond this year. And then I had a follow-up. Yeah.
Chuck
I feel good where we are, Steve. And as Kyle just mentioned, you know, that .8, if we get the .8 book to bill, which, you know, we feel pretty confident in, then we'll have enough backlog to kind of cover through this adjustment period. And as I mentioned, you know, everybody feels, remains bullish mid to long term. In terms of CommScope initiatives, I mean, this is something we put in place. You know, we've been running this program now for more than a year. And we're seeing, you know, the teams really starting taking, not to use initiatives again, but they're taking initiative here to find opportunities to save money, to cut waste, to find opportunities for growth. And I'm really proud of where the team is and what we've dealt with this year. You know, I remain confident in the 135 to 15. Frankly, I thought we'd be a lot further ahead of this. It's just we had just a lot of disruptions.
Stephen Foss
Great. That's helpful. And then just in terms of your own fiber cable expansion plans, can you just sort of update us on where you're at? Has anything changed? And how we look at that vis-a-vis your largest competitor in terms of impacting, you know, lead times and stuff like that? Thanks.
Chuck
Yeah, I really appreciate that question because I believe that the capacity that we installed and we installed earlier than everyone else allowed us to grow faster than the market. I think that also has, you know, an impact on book to bill because I believe we were able to ship out a lot more of our backlog than others and our growth higher than the market in many, you know, in those segments. And so, again, I feel good about I feel good about our guideposts and where we are.
spk00
Great. Thank you.
Kyle
Thank you. One moment for our next question. Now, next question coming from the line of Simon Leofold with Raymond James, the Elanis Open.
Simon Leofold
Thanks for taking the question. I imagine this might be a bit sensitive, but bluntly you know charter had announced a a large network upgrade strategy uh back in december and i'm trying to get a good sense of how you view the opportunities and the implications and you know if you want to speak generically about cable trends that's great but love to really gain insight on the charter impact for you guys and then i've got a quick follow-up yes i look i
Chuck
As you would expect, I mean, we're in constant dialogue with our customers about new opportunities and new products. Obviously, we're not going to go and mention specific customers or products, but I would comment that as a leader in this space, we're involved in most, if not all, bids. And as the network moves more to the edge, we're focused on maintaining our market leading position with those products. And you think about the amplifiers and the nodes, the hardware, as well as you're aware we announced that we're going to support our customers whichever path they go, whether that's with remote MAC5, remote PHY, with virtual CMTS, or in eCore or E6000. We're here to support them whichever way they go.
Simon Leofold
So that's how I'd leave it. Okay. And then I just wanted to follow up. On the performance for gross margin in December, when you discuss segments, there are a number of segments you mentioned. had some outperformance that may not be sustainable. But I guess what I'm really trying to get a better sense of which of the segments really drove the sequential improvement in your gross margin for the fourth quarter versus September. It does look like something or some elements must have taken some pretty big jumps, and I want to make sure I'm quantifying those. Thank you.
Mick
Yeah, so... You know, clearly as we went through 2022, you know, quarter sequentially, you know, as we implemented our price changes to offset inflation, you know, we saw, you know, in many of the businesses an improvement in EBITDA sequentially through the year. As we think about the fourth quarter, you know, the performance in the next business has been helpful to us as, you know, that is a, you know, on a gross margin basis, that's one of our higher gross margin segments. So, I mean, I think it's a trend of, you know, sort of all the businesses, you know, generating improvement through the price increases. And then, you know, we clearly had a strong result in our next business, which again, you know, helps us from a margin standpoint.
Simon Leofold
Thank you.
Kyle
Thank you. And our next question coming from the line of Matthew Nickham with Deutsche Bank.
Matthew Nickham
Hey guys, thank you for taking the questions. I want to go back to backlog. By my math, it looks like total backlog for the corp was down roughly a billion this quarter. I'm just wondering if there's any additional color you can share here, just in terms of orders and backlog, especially for the core business. And then, On OWN, just curious, how long do you anticipate these depressed trends continuing? And if the revenue trend here continues, how would margins trend for this segment in 23? Thanks.
spk00
Yes.
Mick
Yes. So, on the backlog side, you know, clearly we've indicated that, you know, where our book to bill was. And I think as we've made comments in previous calls, we expected our backlog to come down as we brought capacity on. So I think the backlog reduction that we've seen is not something that is surprising to us. And to be honest with you, I think we'd expect that to continue to come down to more normalized levels as supply chains get better and as our capacity comes online and our lead times improve, customers just, you know, they don't need to go out and get in line because our lead times are now, you know, weeks, whereas, you know, earlier in 2022, we were talking about, you know, multi-month lead times. So I think, you know, that's on the backlog question, that's our answer there. I think on the OWN side, you know, clearly we're seeing a reduction in the North American carrier spend that has an impact on us. You know, we'll see that in 23, and we'll continue to monitor that as, you know, they move into 24. I think, you know, offsetting that, as I think we made comments in the prepared remarks, you know, we're aggressively going after, you know, new products to offset some of that as we think about, you know, opportunities to increase our market share. You know, with our mosaic antenna, you know, we're working on antenna solutions that are more energy efficient. So I think even though, you know, we see, you know, some reduction in the carrier spend in North America, we also are, you know, combating that with some of the new products that we're launching.
Matthew Nickham
Got it. If I could just follow up real quick on sort of a normalized backlog. We obviously can follow sort of the total corp numbers you provide in the K, but is that sort of assumed to be like a $2 billion-ish number that you were, you know, at the end of 2020 before a lot of these supply chain issues began to really pick up?
Mick
At the end of 2020, our backlog was about $1.4 billion. Just to give an order of magnitude.
Matthew Nickham
And that's the core business, correct? That was for core, yes. Okay, great. Appreciate it. Thank you.
Kyle
Thank you. One moment, please, for our next question. And our next question coming from the line of Mita Marshall with Morgan Stanley. Your line is open.
Mita Marshall
Hi, thank you. This is Karan Jivakar on for Mita. Thank you for the question. So I just wanted to touch on the next segment. I just wanted to get an idea of how supply chain is resolving there and has it come closer to resolution? And generally, I appreciate sort of your demand commentary there and maybe a little bit of slowdown, but generally, how's the pipeline looking there and sort of how do you expect the pipeline to trend across the year? And then I have a quick follow-up. Thank you.
Chuck
Yeah, so in terms of supply chain, I would say um that uh things are loosening up they're still the you know the one chip in some cases that we're waiting for and looking for but i'm very proud of our teams specifically in engineering and product management and in procurement to just get ahead of the curve and just be extra quick on substitutions testing and redesigns to design in parts that are available i would say the most encouraging piece for me and and for you would be the backlog of of of NICS, which is $777 million, which we're really, really happy about. And when we get parts, I mean, this thing could go really well. We're not seeing demand slow down. In fact, in many of the places we are, I mean, there's still a very strong interest in getting parts early if we have them and trying to help them do more with the projects they have ongoing right now. we feel good about that business.
Mita Marshall
Okay, got it. Thank you. And then just a follow-up on sort of the price increases. I know just generally some of the commodity prices have come in. So are there any, are you getting any pushback or are price increases still holding in as some of those prices have come in or any updated thoughts around price increases?
Chuck
Yeah. Well, in terms of price, I would say, let's just talk about cost for a minute. I would say our costs are pretty constant. In terms of where we are, I mean, we have some costs that actually have gone down. We have some costs that have gone up, but I'd say overall we're more flat. In terms of price, you know, we're hearing about, you know, there's still price increases going on in the marketplace. And, you know, we feel good about where we are with our pricing. I don't know if you'd add anything to that, Kyle.
Mick
No, I mean, to Jeff's point, I think that, you know, as we think about, As we rode up the inflation curve, even though there are some things that are down, there's also other things that are up. And, you know, I think we still feel like, you know, the level of our input costs are high and we haven't seen on a net basis a significant change in that. So I think our, you know, we feel like our pricing is in line with where their input costs continue to be.
Mita Marshall
Okay, got it. That's helpful. Thank you. Thank you.
Kyle
Thank you. One moment, please, for our next question. And our next question coming from the lineup, Tim Savage with Northland Capital Markets. Your line is open.
Tim Savage
Hi, good morning. Just wanted to follow up on Simon's question a little bit on the ANS front and without commenting specifically on very large upgrade opportunities. I think you mentioned an expectation for flat EBITDA margins in ANS in the year? I don't know if you discussed growth potential. I mean, you grew double digits in Q4. Can that continue into next year, or what kind of overall growth expectations would you give us for ANS? Thanks.
Mick
Yeah, I think as we talk going back to our investor day in that business, you know, there's a lot of moving parts in the business as it goes from head end to the edge. I mean, I think we still think that that business is, you know, a lower growth business relative to, you know, maybe CCS and mix. You know, so I think, you know, we don't expect, you know, a lot of top line growth, at least in 23 in that business. I mean, I think we feel like it, you know, probably be in line with, you know, our overall guidepost, which is, you know, flat to low growth.
Tim Savage
Thanks very much.
Kyle
Thank you. One moment, please, for our next question. And our next question coming from the lineup, Amit Daryanani from Epoch-Rio-Sai, Yolanda-Sophia.
spk13
Thanks for taking my question. I have two as well. First off, I was hoping you could maybe spend a little bit more time talking about how do you do free cash flow with stack up in 23 versus the 200 million number in 22. I need to talk about EBITDA growing up by about 125 million. So do you think a lot of that, or maybe you can talk about what percent of that you think can flow into the free cash flow number? So any range you could give on 23 free cash flow would be really helpful. And then I heard you on Q1 being negative for all the reasons you outlined. Last year, if I recall, I think Q2 was also negative. So should we think of free cash flow being more H1 negative, H2 positive? And then at any rate, if we could quantify the numbers of 23, it would be really helpful.
Mick
Yeah, so in our prepared remarks, we talked about our free cash flow projection for 23 is in the $400 million to $500 million range. And Q1 will be a lower number than Q2, Q3, and Q4, which is the normal, you know, it's the normal trend. You know, last year, as we've talked about, was impacted from some of the inventory builds driven by the supply chain issues that we have, particularly in the semiconductor chips. Got it.
spk13
I missed that disclosure from here. If I think about the 23 EBITDA numbers that we're talking about, right, and I think the 125 million of uplift EBITDA dollars year over year, It's only to think about how much of that is driven by just, you know, from a segment of mixed perspective versus benefits from CommScope. Next, I'm trying to get a sense of how much of this is self-help levers versus maybe, you know, one of the segments, which is higher modular mix is going to grow for you. So any color and kind of self-help versus revenue driven tailwinds for EBITDA growth in 2022 would be helpful.
Mick
Yeah, like anything, it's a, It's a blend of, you know, the CommScope next actions that we've undertaken, and it's not just the ones that we're going to do in 23. It's the full year run rate of the things that we did in 22. And then I think in our guideposts, we've talked about, you know, the fact that we've built into those guideposts from 22 to 23, you know, flattish to low growth revenue within that band. And I think when you think about that a minute, we've provided some context on the call about you know, hey, our OWN segment is going to be impacted by some of the carrier spend. And, you know, I think, you know, we feel like, you know, some of the other businesses have better growth opportunities. So net-net, it's flat, but there's going to be some businesses that are down and some that are up. And I think, you know, when you think about, you know, what's being driven by CommScope Next, you know, there's not a specific number, but we should think about, yeah, some of the actions that we're taking in 20 have taken in 22. we're now starting to get the full year impact of that, which is helping the overall EBITDA number improve from 22 to 23. Great.
spk13
Thank you.
Kyle
Thank you. I will now turn the call back over to Mr. Chuck Treadway for any closing remarks.
Chuck
Well, I would like to thank everyone for your support and interest in CommScope, and I hope everyone has a great rest of the week. Thank you.
Kyle
Ladies and gentlemen, that's our conference for today. Thank you for your participation. You may now disconnect.
spk05
The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 11. The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 1 1.
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