Scientific Atlanta's Earnings statement...............
(Digital head end orders up 99%, Pegasus)
newsalert.com
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Scientific-Atlanta Reports Record Fiscal Year Sales and Orders
PR Newswire - August 07, 1997 16:24
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Jump to first matched term ATLANTA, Aug. 7 /PRNewswire/ -- Scientific-Atlanta (NYSE: SFA) reported
today that sales for the fourth quarter ended June 27, 1997 increased 18% to
$322.7 million, an all-time record for the company, compared to the prior
year's fourth quarter sales of $272.7 million.
Orders booked in the fourth quarter were $321.1 million, an increase of
28% over the previous year's fourth quarter, and were a record for any fourth
quarter. Backlog at fiscal year end was $483.5 million, also a record for any
fourth quarter.
Net earnings of $19.6 million, or $0.25 per share, in the quarter
increased 36% over the prior year's fourth quarter, excluding one-time after-
tax charges of $29.4 million, or $0.39 per share in the prior year. The one-
time charges included in the prior year's loss of $15.0 million, or ($0.20 per
share) related to an arbitration award and a write-off of in-process R&D
purchased in an acquisition.
Fiscal year sales increased 11%, to a record $1,168.2 million, compared
with $1,047.9 million in the previous year. Fiscal year bookings of
$1,264.3 million, an increase of 28% over the prior year's total of
$985.5 million, were also an all-time record. Net earnings from continuing
operations were $60.6 million, or $0.78 per share, compared with $7.2 million,
or $0.09 per share the prior year. Net earnings for the year were $64.0
million, or $0.82 per share, compared with a loss of $6.0 million, or ($0.08
per share).
The company's balance sheet remains strong with a cash balance of
$107.1 million at the end of the fiscal year, an increase of $86.2 million
from the end of the prior fiscal year. Days sales outstanding, at 71 days for
the fourth quarter, improved 8 days over the comparable quarter of the prior
year. Inventory turns improved to 4.4 during the quarter compared with
3.5 for the previous year's fourth quarter.
James F. McDonald, Scientific-Atlanta's CEO, said, "This was an excellent
quarter and year. We are pleased at the continued growth in all our key
markets and encouraged by our record sales, bookings and backlog for the
fourth quarter and for the year.
"Our overall subscriber network system sales increased 67% in the quarter
compared to last year's fourth quarter, and bookings were up 85%. The
dramatic success of our 8600x(TM) advanced analog set-top has established
Scientific-Atlanta as the market leader in this important and growing product
category. Its popularity is due to its many advanced features that enhance
the TV viewing experience for consumers. During the quarter the company
delivered 470,000 units compared with 330,000 in the third quarter and a total
for the year of 1.1 million units. We have shipped more than 2.2 million
units to date. We anticipate that the 8600x will continue to play a growing
role in cable operator's capital spending budgets as an economical complement
to digital products.
"We also had good performance in our terrestrial network systems business,
where sales increased 14% and bookings increased 11% compared to last year's
fourth quarter. Our customers are demanding more flexibility in their
networks, and our ability to provide total end-to-end digital and analog
solutions for them makes us unique. Our two-way, real-time network capability
provides our customers with greater network efficiency, improved performance
and our ability to provide an integrated solution makes it easier for our
customers. This is an area of tremendous opportunity for us.
"Our analog headend business was strong in the quarter due to the market
acceptance of our new Continuum(TM) headend system, evidenced by a 46%
increase in bookings of analog headend equipment in the quarter compared to
last year's fourth quarter. Continuum provides a new level of headend
efficiency and performance with advanced client/server management software and
new analog and digital hardware.
"Our share of the opto-electronics market has been enhanced by the success
of our Prisma(TM) Optical Networks product family for digital distribution of
video and data services between cable headends and for optical distribution of
cable services to neighborhoods. Fourth quarter opto-electronics bookings
increased 99% over last year."
The company installed its initial production line for its Explorer(R) 2000( This is Pegasus)
digital set-top in Juarez, Mexico, in the quarter and has since begun limited
production of set-tops there and has begun production of digital headend
equipment in its Atlanta facilities. The company plans to begin field testing
its end-to-end, two-way digital video system in the current quarter and
anticipates a significant ramp-up over the second half of the fiscal year.
International sales in the quarter were approximately 37% of total sales,
led by increases of cable television equipment in Europe, increased sales of
subscriber equipment in Asia and satellite network equipment in Europe.
International bookings were approximately 41% of total bookings. European
bookings of subscriber and terrestrial network equipment were strong, as were
bookings of satellite networks in China.
In satellite communications, five Scientific-Atlanta ground stations from
Iceland to Hawaii began tracking the first 16 IRIDIUM(TM) global
communications satellites, the first of which were launched May 5, 1997.
Scientific-Atlanta is the sole source supplier of ground stations used to
track and communicate with IRIDIUM satellites. Sixty-six satellites are
scheduled to begin providing world-wide telephone service in 1998.
The company continued its move into the US programmer market by adding E!
Entertainment Television and VH-1 to the growing list of US programmers such
as the Family Channel, Discovery Channel, ESPN, Weather Channel and Turner
Broadcasting which have begun using Scientific-Atlanta's Power-Vu(TM)
satellite digital compression system for program distribution in the United
States and abroad. Group W Network Services launched the new CBS Eye on
People cable channel using a PowerVu system as well.
The company's facility expansion in Juarez, Mexico was completed at the
end of the fourth quarter. The addition will more than double the company's
manufacturing capacity in Juarez to more than 200,000 square feet.
McDonald concluded, "A major part of Scientific-Atlanta's strategy is to
help the cable industry with an orderly migration from analog to digital
services. Cable operators have moved over the years from offering basic
analog cable service, to premium channels and pay-per-view, and are now moving
to advanced analog and digital as they prepare to offer a variety of enhanced
services to their customers.
"This new digital entertainment and information world will provide
consumers with an ever-expanding set of services such as access to the
Internet, browsers that capitalize on the enormous information available on
the Internet, broadcast data services, e-mail and on-line commerce through
their television sets. Our unique strength lies in our ability to provide
integrated networks that make this migration to new services simple for our
customers and for consumers.
"A critical factor is the need to provide a network, including all of the
software, that is capable of supporting a wide range of two-way, real-time
interactive communications simultaneously to many subscribers. Today,
approximately 50% of our R&D engineering resources are working on the
development and testing of network and product software. We believe we have
assumed the leadership role in this migration process and that it will
generate many new growth opportunities for us and our customers in the years
ahead."
"Forward-looking statements," as defined in the Private Securities
Litigation Reform Act of 1995, may be included in this news release. A
variety of factors could cause Scientific-Atlanta's actual results to differ
from the anticipated results expressed in such forward-looking statements.
Investors are referred to Scientific-Atlanta's Cautionary Statements (Exhibit
99 to the company's most recent Form 10-Q), which statements are incorporated
into this news release by reference.
Scientific-Atlanta, Inc. (http://www.sciatl.com) is a leading supplier of
broadband communications systems, satellite-based video, voice and data
communications networks, and worldwide customer service and support.
NOTE: Scientific-Atlanta and Explorer are registered trademarks of
Scientific-Atlanta, Inc. Continuum, PowerVu, Prisma and 8600x are trademarks
of Scientific-Atlanta, Inc. IRIDIUM is a trademark of Iridium, LLC.
SCIENTIFIC-ATLANTA, INC.
consolidated statement of earnings
(in millions, except per share data)
Three Months Ended Twelve Months Ended
June 27, June 28, June 27, June 28,
1997 1996 1997 1996
SALES $ 322.7 $ 272.7 $1,168.2 $1,047.9
COSTS AND EXPENSES
Cost of sales 221.9 190.7 809.0 761.9
Sales and
administrative 46.0 36.9 160.6 138.3
Research and
development 27.6 24.6 114.3 95.3
Purchased in-process
technology --- 14.6 --- 14.6
Interest expense 0.1 0.1 0.5 0.6
Interest (income) (1.1) (0.4) (3.9) (1.8)
Other (income)
expense (0.7) 28.3 (1.5) 28.4
Total costs and
expenses 293.8 294.8 1,079.0 1,037.3
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE
INCOME TAXES 28.9 (22.1) 89.2 10.6
PROVISION FOR
INCOME TAXES 9.3 (7.1) 28.6 3.4
NET EARNINGS (LOSS)
FROM CONTINUING
OPERATIONS 19.6 (15.0) 60.6 7.2
LOSS FROM DISCONTINUED
OPERATIONS, NET OF TAX --- --- --- (1.0)
GAIN (LOSS) ON SALE OF
DISCONTINUED OPERATIONS,
NET OF TAX --- --- $ 3.4 (12.2)
NET EARNINGS (LOSS) $ 19.6 $( 15.0) $ 64.0 $ (6.0)
EARNINGS (LOSS) PER
COMMON SHARE
AND COMMON
EQUIVALENT SHARE
Continuing
Operations $ 0.25 $ (0.20) $ 0.78 $ 0.09
Discontinued
Operations --- --- 0.04 (0.17)
Net Earnings
(Loss) $ 0.25 $ (0.20) $ 0.82 $ (0.08)
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES AND COMMON
EQUIVALENT SHARES
OUTSTANDING 79.0 76.8 78.2 76.7
BOOKINGS $321.1 $ 250.3 $ 1,264.3 $ 985.5
SOURCE Scientific-Atlanta, Inc.
CONTACT: Bob Meyers, Scientific-Atlanta, 770-903-4608, fax: 770-903-4775
or robert.meyers@sciatl.com |
