You need to know about this customer. SA earnings release..............
Thursday April 24 4:20 PM EDT - Source: Scientific-Atlanta, Inc.
Scientific-Atlanta Reports Another Strong Quarter
ATLANTA, April 24 /PRNewswire/ -- Scientific-Atlanta (NYSE:SFA) reported today that fiscal 1997 third quarter net income increased 43 percent over the previous year's third quarter, sales increased 11 percent and bookings were 21 percent above the prior year.
Net income for the third quarter ended March 28, 1997 was $16.5 million, or $0.21 per share, an increase of 43 percent compared to $11.5 million, or $0.15 per share, in the previous year's third quarter. Sales were $301.7 million for the quarter, up 11 percent, compared to $271.9 million the prior year. Orders booked in the quarter were $313.9 million vs. $260.2 million in the prior year's comparable quarter, a 21 percent increase.
Domestic sales of terrestrial network products increased 16 percent, while international sales increased 32 percent over last year's third quarter. Domestic terrestrial network bookings increased 48 percent, and international bookings increased 32 percent. Domestic sales of satellite communication products declined 4 percent and international sales declined 17 percent. The decline in international was primarily due to temporary order delays and delays in receiving letters of credit.
For the nine month period, net income was $44.4 million, or $0.57 per share, compared to $9.0 million, or $0.12 per share, in the comparable period last year. The previous year's results included after-tax charges of $13.2 million, or $0.17 cents per share for discontinued operations. Earnings from continuing operations during the period were $41.0 million, or $0.53 per share, compared to $22.2 million, or $0.29 the prior year, an increase of 85 percent. Sales for the period were $845.6 million vs. $775.2 million, an increase of 9 percent over the prior year. Bookings of $943.2 million were 28 percent greater than the previous nine months' $735.2 million. On a year to date basis domestic bookings increased 46 percent and international bookings increased 5 percent. Domestic sales increased 11 percent and international sales increased 6 percent.
Scientific-Atlanta CEO, James F. McDonald said, ``We feel that this was an excellent quarter. Our major customers are increasing their capital spending on transmission equipment for networks, where orders and sales increased 12 percent and 5 percent respectively. They continue to increase spending on subscriber equipment as well, where we saw an 78 percent increase in bookings and a 40 percent increase in sales.
``The continuing strong acceptance of our 8600x(TM) advanced analog set- tops contributed to the gains in bookings and sales. The company delivered more than 330,000 units during the quarter compared with approximately 160,000 in the second quarter. To date we have shipped approximately 1.7 million units and continue to see strong interest in the product.
``Another factor contributing to the favorable bookings and sales situation was increased orders and sales for opto-electronic equipment used in terrestrial networks, up 36 percent and 42 percent respectively, over the prior year.
``Gross margins were 31.2 percent, up 3.5 percentage points from last year's 27.7 percent and one percentage point above last quarter. The improvement came from continued manufacturing cost reductions and favorable yen currency exchange rate, partially offset by product mix.''
The company continues to devote considerable R&D resources to the development of a range of advanced digital systems and products to maintain its leadership position in this emerging market area. R&D spending amounted to $29.6 million in the quarter, up 23 percent from last year.
Some customers are committing to digital video systems, and Scientific- Atlanta is supplying all key components including digital headends, digital opto-electronics and digital subscriber equipment. During the quarter, the company announced a letter of intent with Comcast Cable Communications, Inc. for the purchase of up to 300,000 Explorer(TM) 2000 two-way digital set-top terminals and related headend hardware and software system elements. All set-tops will include the PowerKEY(TM) conditional access system and PowerTV(R) Operating System from the company's subsidiary PowerTV, Inc. Comcast is the second major customer to select the Explorer 2000. The company previously announced an order from Time-Warner of 550,000 units for its Pegasus program, and discussions are underway with other operators.
The company also announced the acquisition of Arcodan A/S, a prominent Danish manufacturer of advanced analog and digital technology headend systems, opto-electronics and RF distribution equipment. The acquisition extends Scientific-Atlanta's reach in selected western and eastern European markets and expands the company's product line. The company anticipates that it will also market Arcodan products in other regions of the world.
In satellite communications, the company's PowerVu(TM) digital video compression systems continued to strengthen their presence in domestic and international markets. In the U.S., FiT TV joined The Family Channel, both members of the International Family Entertainment, Inc., to use PowerVu for program distribution to domestic cable headends. Viacom, Inc., launched its MTV and Nickelodeon services to Latin America using PowerVu technology. CBS Eye on People, a new cable entertainment and information channel, began all-digital operation via PowerVu distribution to U.S. cable affiliates.
Progress continued on the construction of a second manufacturing facility in Juarez, Mexico to be devoted to advanced digital and other products. The factory is scheduled for completion this summer and will more than double the company's Juarez capacity. Current manufacturing capacity in Juarez is more than 1.0 million 8600x advanced analog set-top terminals annually, plus lesser quantities of some other high volume products.
McDonald concluded, ``We continue to focus our efforts on improvements in quality and customer responsiveness in all our businesses. Our goals are ambitious. We want to be the technology, product and systems leader as well as the lowest cost producer of products anywhere in the world. We will deliver products that offer superior functionality, supported by the highest levels of service.
``To that end, we are committed to the implementation of programs throughout our corporation to increase quality, strengthen manufacturing and other operations, enhance customer service and support and to improve internal systems and processes. We believe that is the surest road to increasing profitability and customer satisfaction as the global markets we serve continue their dramatic growth 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 the company's actual results to differ from the anticipated results expressed in such forward-looking statements. Investors are referred to the company'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, data and voice communications networks and provides worldwide customer service and support. The company is committed to continual improvements in quality and customer support.
NOTE: 8600x, Explorer, PowerKEY and PowerVu are trademarks of Scientific- Atlanta, Inc. PowerTV is a registered trademark of PowerTV, Inc.
SCIENTIFIC-ATLANTA, INC.
Consolidated Statement of Earnings
(in millions, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
March 28, March 29, March 28, March 29,
1997 1996 1997 1996
SALES $ 301.7 $ 271.9 $ 845.6 $ 775.2
COSTS AND EXPENSES
Cost of sales 207.4 196.7 587.2 571.2
Sales and administrative 41.5 35.1 114.6 101.4
Research and development 29.6 24.0 86.7 70.7
Interest expense 0.1 0.2 0.3 0.6
Interest (income) (1.1) (0.4) (2.8) (1.4)
Other (income) expense --- (0.6) (0.7) ---
Total costs and expenses 277.5 255.0 785.3 742.5
EARNINGS FROM CONTINUING
OPERATIONS BEFORE
INCOME TAXES 24.2 16.9 60.3 32.7
PROVISION FOR INCOME TAXES 7.7 5.4 19.3 10.5
NET EARNINGS FROM CONTINUING
OPERATIONS 16.5 11.5 41.0 22.2
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 $ 16.5 $ 11.5 $ 44.4 $ 9.0
EARNINGS (LOSS) PER COMMON SHARE
AND COMMON EQUIVALENT SHARE
Continuing Operations $ 0.21 $ 0.15 $ 0.53 $ 0.29
Discontinued Operations --- --- 0.04 (0.17)
Net Earnings $ 0.21 $ 0.15 $ 0.57 $ 0.12
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES AND COMMON
EQUIVALENT SHARES
OUTSTANDING 78.3 76.5 77.9 76.6
BOOKINGS $ 313.9 $ 260.2 $ 943.2 $ 735.2 |
